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Non-Clearing Membership

Non-Clearing Membership

The main requirements for Non-Clearing Member (NCM) status are the following:

  • Conduct of derivatives trading in a commercial manner
  • Evidence that the respective applicant is subject to proper banking or exchange regulation in its country of origin
  • Minimum equity capital of EUR 50.000, unless the applicant is a bank
  • Admission and registration of at least one Trading Participant (Trader Admission)
  • Registration of at least one qualified a back office staff member
  • Participation in the clearing process - either by signing a NCM-Clearing Member Agreement with a General Clearing Member (GCM) or with a Direct Clearing Member (DCM) and Eurex Clearing AG. A DCM may act as clearer for a NCM provided the companies are 100 percent affiliated.
  • Compliance with mandatory technical requirements for connection to the Eurex® system (connection alternatives)

Companies may become Trading Participants without having a Clearing License as Non-Clearing Members. NCMs must conclude a NCM-Clearing Member Agreement with either a GCM or a group-affiliated DCM and Eurex Clearing AG. Clearing Members (GCMs and DCMs) may clear their own trades as well as those executed on behalf of their customers and the trades of NCMs. NCMs may execute their own and their customers' orders. NCMs are responsible for exercises and position management functions online. At all times they are able to maintain a system-side overview of the payment and delivery obligations that result from their trading activities.

NCMs may enter into agreements with different Clearing Members on a  per market basis (e.g. Eurex Exchange, Eurex Bonds, Eurex Repo, etc.). Additionally, for Eurex Exchange, an NCM can set up relationships with a maximum of three different Clearing Members. This offering is referred to as multiple clearing relationships (MCR) and enables NCMs to clear different MCR-product groups with different Clearing Members. NCMs continue to have the flexibility to use the “give-up/take-up” functionality to transfer trades within one specific platform to another participant.

Because NCMs have no direct contractual relationship with Eurex Clearing AG, transactions are essentially concluded between Eurex Clearing AG and a given Clearing Member, and in turn between that Clearing Member and the specific NCM. Also, margin deposits and fee payments, for example, are made to the clearing house via the contractually stipulated Clearing Member.