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Eurex describes its new ISA Direct platform

Eurex Clearing is planning to roll out its new ISA Direct product this summer. The company says there are numerous benefits to allowing buy-side participants to have direct contractual relationships with the clearing house.

"ISA Direct allows banks to meet the challenges of more stringent capital requirements, while buy-side firms will be able to lower their counterparty risk," Matthias Graulich, Eurex's chief strategy officer told Risk.net.

The initial roll-out will be offered for interest rate swaps and repo transactions. Ultimately, listed derivatives and securities lending will be included.

Among the key features of ISA Direct are:

  • Direct membership of buy-side firms at the clearing house facilitated by a clearing agent
  • The clearing agent acts as agent to cover the default fund contribution, default management obligations and optionally certain operations and financing functions.
  • ISA Direct members maintain legal and beneficial ownership of collateral.

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