Collateral management: Successful go-live of a DLT-based Collateral Mobilization Service to enhance market efficiency

1.   Introduction

Eurex Clearing today announced the successful launch of a solution enabling the delivery of margin collateral utilizing Distributed Ledger Technology (DLT) infrastructure. This innovation aims to enhance the flexibility, speed, and efficiency of securities collateral mobilization. The model was designed together with HQLA^x and Clearstream Banking Luxembourg (CBL) to enable margin and default fund allocation by mobilizing securities collateral from other custodians to CBL using the HQLAx DLT platform.

The model is envisaged to be used for margin collateralization of Clearing Members’ own or clients’ exposures to Eurex Clearing. Liabilities and obligations of CBL as collateral location vis-à-vis Eurex Clearing remain the same. 

2.   Required action

No further action is required. 

3.   Details of the initiative

This innovative initiative marks a significant milestone in the digital transformation of collateral management, enabling near-instantaneous access and utilization of securities collateral - regardless of its physical location - to meet margin requirements set by the CCP. The solution has received a non-objection from BaFin, the German Federal Financial Supervisory Authority, confirming compliance with regulatory standards and paving the way for a secure and legally sound implementation of DLT in collateral processes.

The HQLA^x DLT platform, which includes Clearstream International (CI) functioning as a Trusted Third Party, employs CBL as a sub-custodian to enable the collateral mobilization from the custodian of choice for the relevant Clearing Members. The Clearing Member utilizes the HQLA^x DLT platform to receive securities on its own collateral account at CBL. This ensures that the collateral can be utilized to cover its margin and/or default fund obligations vis-à-vis Eurex Clearing. The service went live today, 30 June 2025.

Key Benefits

• Enhanced Collateral Mobility: Instant access to securities collateral across jurisdictions.
• Operational Efficiency: Faster transfers reduce costs and improve liquidity management.
• Security and Compliance: Built on a secure DLT framework with regulatory approval.
• Seamless Integration: Leverages existing processes and reporting structures, delivering new value without disruption.

Service Scope and Requirements

• The service supports both pledge and title transfer legal regimes.
• It is envisaged to be used for margin allocation of Clearing Members’ own or clients’ exposures to Eurex Clearing.
• A dedicated CBL collateral account linked to Eurex Clearing's C7 CMS collateral location “CBL/HQ” is required.
• The Clearing Member has to participate in the HQLA^x DLT platform.
• There are no changes to the existing Pledge Agreement or Appendix 14 for title transfer.

If you are interested in using the new service, please contact your Clearing Key Account Manager or send an e-mail to client.services@eurex.com.

Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the Clearing Conditions or FCM Clearing Conditions of Eurex Clearing AG, as applicable.
 

Further information