RegAlert2018-12-20 | CFTC Staff Letter 18-31Added · Updated
CFTC Staff Letter 18-31: Conditional No-Action Relief for Eurex Clearing and FCMs to Hold Customer Margin Securities at Clearstream
The CFTC Divisions grant conditional no-action relief to Eurex Clearing AG and its Futures Commission Merchant (FCM) clearing members, permitting them to hold customer-owned securities as margin for cleared swap transactions at Clearstream Banking AG (CBF) in Germany, despite CBF's regulatory capital being below the $1 billion threshold required by Regulations 1.49(d)(3) and 22.9. The relief also allows U.S. dollar-denominated securities to be held at CBF outside the U.S., subject to Regulation 1.49(e)(1)(i), provided that the securities are issued by entities in Germany, France, the United States, Canada, the United Kingdom, or Japan. Conditions include mandatory written disclosures to customers, annual due diligence on custody chain entities, and restrictions on the amount of U.S. dollar securities held relative to customer authorization.
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U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
CFTC Letter No. 18-31
No-Action
December 20, 2018
Division of Clearing and Risk
Heike Eckert, Chief Operating Officer
Oliver Haderup, Chief Compliance Officer
Eurex Clearing AG
Mergenthalerallee 61
65760 Eschborn, Germany
December 20, 2018
Re: No-Action Relief from Regulations 1.49(d)(3), 1.49(e)(1)(i), and 22.9 to Permit Futures Commission Merchants that are Clearing Members of Eurex Clearing AG to Deposit Customer-Owned Securities as Margin Collateral for Swap Transactions with Clearstream Banking AG Dear Ms. Eckert and Mr. Haderup:
This is in response to your letter dated November 5, 2015 (“November 2015 Letter”) to the Division of Clearing and Risk (“DCR”) of the Commodity Futures Trading Commission (“CFTC” or “Commission”). In your November 2015 Letter, you requested that DCR exempt Eurex Clearing AG (“Eurex Clearing”), futures commission merchants (“FCMs”) that are clearing members of Eurex Clearing, and Clearstream Banking AG (“CBF”) from Commission Regulation 1.49(d)(3) in order to permit Eurex Clearing and its clearing member FCMs to maintain customer securities as margin for cleared swap transactions with CBF, a central securities depository (“CSD”) based in Germany. 1 The November 2015 Letter was supplemented by further written submissions dated January 20, 2016, March 7, 2017, March 27, 2018, April 27, 2018, May 25, 2018, and September 7, 2018. DCR and the Division of Swap Dealer and Intermediary Oversight (“DSIO” and collectively with DCR, the “Divisions”) are jointly responding to your request as it extends to how customer securities are held as margin collateral for cleared swap transactions by both Eurex Clearing, as a registered derivatives clearing organization (“DCO”), and by FCMs as clearing members of Eurex Clearing.
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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