As part of its risk management policies, EuroCCP requires its participants to post collateral to its guarantee and margin funds at least two business days prior to activation.
A deposit of €1 million as initial guarantee fund contribution is required. In addition, subject to the account structure that the Participant chooses to adopt, the following margin contributions will fall due
- €1 million if the Participant maintains one or more house accounts.
- €1 million if the Participant maintains one or more client accounts.
The margin contribution is intended to cover the first day of a new Participant’s trading activity. Actual margin contribution required will be advised on the morning of the second day of trading. A Participant is entitled to withdraw any excess margin amount if it wishes.
Once the applicant’s membership has been approved, EuroCCP will contact the Participant with instructions indicating where to send Margin and Guarantee fund payments.
A Debit MT202 message is sent to automatically debit a Participant’s margin cash account. This relieves the participant of having to input manual instructions, thereby freeing up operational resources.
EuroCCP issues SWIFT debit messages to a Participant’s settling bank in the Participant’s preferred currency and margin report statements to the Participant from 6am London time onwards.
EuroCCP accepts a minimum of 40% cash in an acceptable currency (currently euros, sterling or US dollars), and the balance in eligible government securities or letter of credit in prescribed form issued by an approved letter of credit issuer (letters of credit up to a maximum 25%).
Withdrawals/substitutions can be processed using EuroCCP's user-friendly web-based application or by sending a fax request to EuroCCP Risk Management department at +44 (0) 207 650 1589. This should be followed up by an email to riskgroup@euroccp.co.uk. The deadline is 12:00 (noon) London time.
Yes. EuroCCP operates on an at-cost basis and applies rebates on all credit interest to a Participant’s margin and guarantee fund without taking a spread.
The interest applied to Participants’ accounts is the sum of all interest received by EuroCCP. A 'blended' rate is calculated. EuroCCP does not take a spread on the interest - it is all passed through to Participants’ accounts by applying the rate to their average monthly balances. The rate and amounts are advised on the end-of-day collateral statement.
As a risk mitigation strategy, EuroCCP holds Participant funds with multiple cash agents. If securities are provided, they are held either at Euroclear Bank or Euroclear UK & Ireland.