Deutsche Börse’s clearing house is close to resolving a key issue related to the protection of assets that has delayed its authorisation under sweeping EU derivatives reforms.
In mid-March, Germany-based Eurex Clearing told its members that its EMIR approval would be delayed after it failed to get the required sign off from other national regulators, sparking fears that national interests may be hampering the process. But according to sources close to the German exchange group, the regulators’ decision not to approve Eurex Clearing was in part due to legal issues around how it ring-fences client assets.
The differences between bankruptcy laws in Germany and other European countries means Eurex Clearing needs a legal opinion from each member state on whether its account structures are compatible with national laws. Many of the largest European countries have approved Eurex’s account structures but a few outstanding approvals are needed before the clearing house is deemed to be EMIR compliant.
A Deutsche Börse spokesperson said: "Eurex Clearing confirms that it will offer its omnibus client segregation model (including the option to transfer positions and assets in case of a clearing member default) and its individual client segregation model to all of its EU clearing members and their clients from the first day of its authorisation under EMIR. For many jurisdictions this offering is already available today."
So far only Nasdaq OMX's Nordic clearing house and cash equities clearing house EuroCCP have received approval under EMIR. The approval of Nasdaq OMX means the clearing of some OTC derivatives will begin by December at the earliest.
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