Friday October 13 2017

News Source: Global Exchanges

Focus: Derivative Market Segment

Type: General




Due to the EurexOTC Clear Release 8.0, Eurex Clearing AG (Eurex Clearing AG) will offer clearing members an alternative handling of variation margin (VM) payments with respect to proprietary OTC IRS transactions as settlement rather than collateral..

For this to be achieved, Eurex will establish a new contract model for OTC IRS transactions called “settled-to-market” (STM), in which VM payments are treated as a settlement from a legal point of view.

STM contracts will be structured as follows:

  1. The outstanding risk position of such contracts will be fully and finally settled every day.
  2. The terms of the contract are reset on a daily basis so that the market value of these contracts is equal to zero. Economically, the transaction is not affected by the switch to STM.

For additional information please click the link above.