Eurex describes its new ISA Direct platform

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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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