Clearing is used to net claims and liabilities relating to financial instruments against each other. Eurex Clearing AG, Deutsche Börse Group’s clearing house, acts as a buyer for every seller and a seller for every buyer. Market participants provide collateral to manage the risk that arises in trading.
With Eurex Clearing AG, Deutsche Börse has an integrated clearing house, which ensures the fulfilment of trades in the cash and derivatives markets: thereby, the clearing house steps in as a central counterparty (CCP) between the buyers and sellers and enables all participants in the trading of equities, derivatives and repo transactions to effectively manage their risks – for both on-exchange and off-exchange (over-the-counter, OTC) transactions. The CCP offers trading participants three central advantages:
- It assumes the risk of a possible counterparty default. For this reason, trading participants have to deposit collateral.
- Buy and sell orders between two trading parties are netted against each other and cleared on a daily basis.
- The CCP ensures that each transaction remains anonymous, even during settlement.
Eurex Clearing is the central counterparty responsible for all trades executed on Eurex Exchange and Eurex Repo®. Besides the Eurex exchanges and trading platforms, Deutsche Börse Group’s cash market including Eurex Bonds®, and the Irish Stock Exchange use the clearing house as a central counterparty. For the European Energy Exchange, European Commodity Clearing AG serves as CCP. Thanks to this integrated structure, which covers trading and clearing services via a single electronic system, market participants benefit from a high-quality, cost-efficient and comprehensive value chain.
Eurex Clearing provides services for more than 175 clearing members in 17 countries, manages a collateral pool worth around €50 billion and processes gross credit risks of almost €16 trillion per month.
Through EurexOTC Clear, Eurex Clearing has developed efficient solutions for the collateralised clearing of transactions in selected derivatives that were previously traded off-exchange. By linking to EurexOTC Clear, market participants can clear OTC interest rate swaps via the central counterparty in advance of the introduction of a clearing obligation for these financial instruments when the European Market Infrastructure Regulation (EMIR) is implemented.
Eurex Clearing Prisma® enables a portfolio-based clearing, deposited collateral can be combined and netted on different markets and for different products.