Existing clearing members are able to easily extend their current clearing licenses to include the ISA Direct or the ISA Direct Indemnified Model. If they are already an OTC IRD or Repo General Clearing Member then they may also become a Clearing Agent for those markets by following the below steps.
Extending your existing licence by
entering, i.e. signing a new clearing agreement with Eurex Clearing and the ISA Direct Member (IDCM) / ISA Direct Indemnified Clearing Member (IDICM).
In case securities are considered to be pledged as margin collateral with respect to an IDCM/IDICM additionally a new pledge agreement needs to be signed.
It is the Clearing Agent's responsibility to post the default fund to Eurex Clearing with respect to the IDCM/IDICM transactions. Contribution to the Default Fund depends on the relative risk exposure brought to the Eurex Clearing system by each IDCM/IDICM.
For further information on the Default Fund click here.
In the ISA Direct Indemnified Model, it’s the obligation of the Indemnifying Clearing Agent to provide an indemnity ensuring the fulfilment of the ISA Direct Indemnified CM contractual obligations towards the CCP in a default scenario.
Following services or business functions can be either fulfilled by the Clearing Agent/Indemnifying Clearing Agent, the ISA Direct Clearing Member/ISA Indemnifying Clearing Member or a third party (e.g. custodian) in case eligible:
Collateral infrastructure
Business Functions
Whatever operational set up you decide upon between you and your IDCM/IDICM, you will agree the set up using the Clearing Agent Limitation Notice.
