Eurex Clearing is to launch a new membership type – ISA Direct – that it says will allow buy-side participants to have a direct contractual relationship with the clearing house facilitated by a clearing agent. It says ISA Direct addresses changes in the regulatory landscape and will contribute to the safety, robustness and efficiency of the overall market.
The new model will be available from summer 2016 onwards and will initially be offered for Eurex Clearing’s interest rate swaps and repo transactions of Eurex Repo’s “Select Finance” service. Listed derivatives and securities lending transactions are to follow. All regulatory approvals have been received, the firm adds.
Said Daniel Berner, chief investment officer at Swiss Life Switzerland: “ISA Direct alleviates the regulatory requirement to centrally clear OTC derivatives in several ways. By enabling us to become a direct member of the CCP, our concerns regarding counterparty credit risks, clearing costs and portability of our assets are much better addressed compared to the traditional client clearing model.”
Added Jason Vitale, managing director for listed derivatives & markets clearing, Deutsche Bank: “The positive impact of Eurex Clearing’s new clearing models for OTC derivatives and repo is evident. General collateral pooling positively influences our ability to fund business activities of our clients and tackles current liquidity constraints in the repo market. ISA Direct allows clearing members to continue their operational clearing relationship with clients without requiring the traditional per-formance guarantee. Therefore, we support a quick roll-out of both products.”