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Working committees and advisory boards

Working committees and advisory boardsAs at 1 March 2016

Listing

Issuer Markets Advisory Committee (IMAC)

The IMAC advises Deutsche Börse on the development of the primary market and the design of the listing segments. The committee consists of issuer representatives, institutional investors, issuing houses and their advisors. In 2015, it actively accompanied and supported the introduction of the Deutsche Börse Venture Network. The discussion focused once more on the quarterly reporting and IPO/IBO activities of the Frankfurt Stock Exchange.

Trading

Cash market trading

Amsterdam Equity Market Advisory Committee (AEMAC)

This committee was established in 2009 to offer Dutch trading participants a forum for feedback, suggestions and discussions. It is designed in particular for users of algorithmic trading and addresses such issues as new and existing Xetra® functionalities and the latest market developments.

Working Committee for Equity Indices

This working committee issues recommendations for the composition of Deutsche Börse AG’s selection indices based on fixed index rules. In addition, the committee advises the company on issues related to index structuring and updates to the rules.

Designated Sponsor Workshop

The Designated Sponsor Workshop comprises Xetra trading participants who are admitted as Designated Sponsors for shares and provide additional liquidity to the market on behalf of a company. The workshop deals mainly with minimum requirements, legal conditions such as recent short-selling regulations and MiFID II as well as issues at an operational level.

London Equity Market Advisory Committee (LEMAC)

LEMAC was initiated in 2004. Participants are the leading trading institutions from the financial centre of London. The committee meets two times a year in order to discuss new development opportunities and functionalities for Xetra as well as regulatory developments.

Secondary Markets Advisory Committee (SMAC): Retail

The SMAC Retail Committee focuses on the functionalities of the intermediary-based trading system at Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange) and the trading volumes in the Xetra electronic trading system initiated by the banks’ private customer business. Market models and measures planned for individual products are developed jointly, presented and discussed.

Secondary Markets Advisory Committee (SMAC): Wholesale

The SMAC Wholesale Committee focuses on trading on the Xetra platform, the general conditions for this and planned developments.

Futures trading

Working Committee for Equity Products (Eurex)

The working committee is composed of the most important market participants in the field of Eurex equity derivatives. It gives recommendations on operational and strategic issues to management. In 2015, it discussed issues including the possible impact of regulatory changes on individual equity derivatives and the further expansion of the product portfolio of equity options with weekly maturity to cover all components of the EURO STOXX 50® index.

Working Committee for End Investors (Eurex)

In 2015, this Eurex working committee discussed Eurex product initiatives as well as service initiatives in the areas of market data and risk management. In the area of equity/equity index derivatives, its members talked about enhancing the product range, e.g. with Mini-DAX® futures, derivatives on MSCI factor indices, EURO STOXX 50® quanto futures and single stock no-dividend futures. With regard to the segment for VSTOXX® derivatives, it addressed the conversion of VSTOXX® options against the background of an approval to trade in the USA by the US regulatory body CFTC. In the foreign exchange asset class, the members discussed enhancing FX futures and options traded on the stock exchange as well as offering to trade in FX OTC instruments in connection with the takeover of 360 Treasury Systems AG. The discussion in the area of fixed income focused on introducing futures on Spanish government bonds. The committee continued to debate whether to introduce the “Trade at Index Close” trading function as well as the Eurex IOC liquidity indicator for options in the area of market data to determine liquidity in options trading. In the light of the conversion of margin calculations to Eurex Clearing Prisma®, the committee presented this new risk calculation method.

Working Committee for Index Products (Eurex)

The working committee is composed of the most important market participants in the field of Eurex index derivatives. It gives recommendations on operational and strategic issues to management. In 2015, it discussed the impact of regulatory changes with regard to index derivatives. Furthermore, the expansion of the product portfolio to include futures on the DAX index with a low contract value (Mini-DAX futures), derivatives on new STOXX and MSCI indices as well as US dollar-denominated futures on the EURO STOXX 50® index (quanto futures) were on the agenda.

Working Committee for Interest Rate Products (Eurex)

The working committee is composed of Eurex market participants and advises the derivatives exchange on launching new interest rate products and trading functionalities as well as on necessary changes to existing products. In 2015, as well as possible maintenance activities for existing futures and options products on European government bonds, the committee discussed expanding the European futures segment to include Spanish government bonds. Furthermore, it talked about the impact of regulatory changes through MiFIR/MiFID II on pre- and post-trading as well as the further futurisation of OTC markets in the euro area.

Clearing

Working Committee Derivatives Clearing (Eurex Clearing)

The Derivatives Clearing Committee has been established to provide Eurex Clearing Members with detailed information regarding potential changes to Eurex Clearing's service offering and for the Eurex clearing members to support and advise Eurex Clearing on all functional and operational aspects arising in connection with the execution and clearing of business in products cleared by Eurex Clearing and to make recommendations to the management board of Eurex Clearing.

The most debated topic was the mandatory migration to the new C7® clearing infrastructure, focusing on the migration steps, the testing in simulation as well as the new and enhanced functionality. New arrivals in the suite of listed derivatives inventory was the second most discussed topic, including the trading and clearing of the GMEX constant maturity future and the “Trade at Index Close” (TAIC). Another main topic was the new ISA direct clearing model which redefines the relationship between buy-side customers, clearing members and the CCP.

EMIR Risk Committee (Eurex Clearing)

The task of the EMIR Risk Committee is to advise the Supervisory Board and the Executive Board on any arrangements that may impact the risk management of the CCP, such as a significant change in its risk model, the default procedures, the criteria for accepting clearing members, the clearing of new classes of instruments or the outsourcing of functions. In 2013, the Risk Committee was restructured in accordance with Article 28 of EMIR (European Market Infrastructure Regulation). It is composed of members of the Supervisory Board of Eurex Clearing AG, representatives of clearing members and representatives of clients.

Working Committee Clearing Collateral

The Clearing Collateral Committee has been established to provide Eurex Clearing members with detailed information regarding potential changes to Eurex Clearing's service offering and for the Eurex Clearing members to support and advise Eurex Clearing on all functional and operational aspects arising in connection with the execution and clearing of business in products cleared by Eurex Clearing and to make recommendations to the management board of Eurex Clearing.

The Collateral Committee, having been convened in late 2014, first elected its officers and considered the future of central clearing and the advantages gained by clearing through a single multi-asset class central counterparty offering cross product margining. Securities financing transactions offered by Eurex Clearing were covered in detail, as was the developments being made to the CCP's collateral management capabilities. Lastly, provision of cash to the CCP and expanding the clearing services to buy-side were considered in late 2015.

Working Committee Securities Clearing and Settlement

The Securities Clearing and Settlement Committee has been established to provide Eurex Clearing members with detailed information regarding potential changes to Eurex Clearing’s equities, bonds and repo service offering. The most important topic, presented in the committee in 2015, and even before, was the implementation of the TARGET2-Securities project of Eurex Clearing, including detailed discussions on specific sub-topics, e.g. reporting, testing and simulation, corporate action processing as well as partial settlement. Late delivery fines regime, Eurex Clearing billing changes and Xetra relevant topics, such as volume discovery service, self-match prevention functionality and settlement internalisation were also subject of the committee’s work in 2015.

Working Committee IRS Product

The IRS Product Committee has been established to consult with and make recommendations to the Management Board of Eurex Clearing on matters relating to the clearing of Interest Rate Swaps. The IRS Product Committee consists of up to 13 clearing members. Members are nominated to the committee based on their overall exposure in the interest rate market and the volumes cleared for a one-year term.

Working Committee Default Management Committees

Eurex Clearing establishes Default Management Committees (DMCs) to involve its clearing members in and to ensure the availability of the best possible knowledge and expertise in case of a default. The DMC is a panel that is continuously defined, but only temporarily convened, to assist the clearing house with regards to any relevant matter of the default management process (DMP) of one or more liquidation groups. In addition DMCs are participating in the regular default simulation exercises. DMC member institutions are eligible clearing members that are actively clearing with Eurex Clearing and each DMC member institution nominates a DMC member and a deputy. Members of the DMC will be traders who will advise on and execute the agreed hedging strategies as coordinated by Eurex Clearing.

Audit and Risk Committee

The Audit and Risk Committee – in compliance with CRD IV (Capital Requirements Directive) and EMIR – deals, on the one hand, with audit matters particularly related to the preparation of the annual budget, the accounting process, internal and external audits, compliance and control systems. The Committee discusses and examines the annual financial statements and the auditor’s report on the annual financial statements in detail and reports the results to the Supervisory Board and recommends e.g. that the Supervisory Board approves the annual financial statements. On the other hand, the Audit and Risk Committee addresses risk matters, inter alia advises the Supervisory Board on the institution’s current and future risk appetite and risk strategy and examines whether the incentives provided by the remuneration system take into account the risk, capital and liquidity structure of Eurex Clearing. The Committee consists of three members who are elected by the Supervisory Board.

Compensation Review and Nomination Committee

The core tasks of the Compensation Review and Nomination Committee – in compliance with CRD IV, EMIR and the new Remuneration Ordinance – are to supervise the adequate arrangement of the remuneration system for Executive Board members of Eurex Clearing AG and to prepare the resolutions of the Supervisory Board on the remuneration of the Executive Board, taking into account the implications for the risk and risk management of the institution. Further core competences of the committee are to identify candidates to fill vacancies in the Executive Board and to prepare the proposals for the election of members of the Supervisory Board, as well as to assess the composition and performance of the Executive Board and the Supervisory Board and to assess the knowledge, skills and experience of individual members of the Executive Board and the Supervisory Board periodically, at least annually. The committee consists of three members who are elected by the Supervisory Board.

Post-trade

Advisory Board – Clearstream Banking Frankfurt

This Advisory Board, which is composed of representatives from all key customer groups, advises the Executive Board of Clearstream Banking AG, Frankfurt, in all questions relating to the German settlement business. In 2015, its discussions centred on compliance topics, account segregation and on regular updates to the T2S project of the European Central Bank.

Advisory Committee of the Board of Directors of Clearstream International

The CI Board’s main tasks and competencies are to provide, in the areas of expertise of its members, the Clearstream International Board of Directors with advice and recommendations on any matter of relevance for the company. The CI Advisory Board meets three times per year.

Customer Consultation Committee – Clearstream Banking Luxembourg

The Customer Consultation Committee (CCC) is a forum for topics with strategic relevance for Clearstream and its customers to anticipate and understand the needs and expectations of the Clearstream client base even better. Subject matters discussed at the CCC are usually related to Clearstream and market-wide initiatives, their development and potential impact on the market landscape and its various players. Some of Clearstream’s customers are permanently represented at the CCC, which meets three times a year.

In 2015, the CCC members share their views on the below business topics:

  • Global Liquidity Hub – Trends and opportunities
  • Investment Fund Services
  • Update on Industry – Wide Financial Crime Compliance Principles
  • EMIR
  • Core products – 2016 deliverables
  • Client Services and client satisfaction

Market data

STOXX Global ESG Leaders Advisory Board

The STOXX® Global ESG Leaders Advisory Board was founded in 2011. It focuses on the ongoing development of the STOXX Global ESG Leaders index family, in particular by identifying new aspects that are to be integrated into the underlying methodology. In addition, the role of the Board is to ensure the integrity of the index model, thus ensuring that indices can be used for investments.

IT

Deutsche Börse IT Open Day

This customer event was held in 2015 for the eighth time and is a platform for in-depth dialogue between Deutsche Börse Group and market participants. The event is designed for decision-makers in trading departments in addition to the IT managers from Deutsche Börse Group’s various customer groups: Around 500 participants took part in 19 workshops on technical and functional topics.

 

Further information