Eurex plans hedging contest in default auction revamp

New step in the default management process would enhance transparency in hedge provider selection

default-auction-revamp

Eurex is set to introduce a new auction procedure to its default management process, which would see members compete to conduct hedges for a defaulting member’s portfolio before the positions are liquidated.

The new component would precede the main liquidation auction in the event of a clearing member collapse. It replaces an opaque process in which the Frankfurt-based clearing house currently appoints a hedging provider in consultation with its default management committee (DMC), in an attempt

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