Client Asset Protection

Transcription

1 Client Asset Protection Overview October 2013

2 Agenda Introduction to Eurex Clearing Segregation models overview Eurex Clearing s client asset protection services Individual Clearing Model Omnibus Clearing Models 2

3 Eurex Clearing has a strong footprint across Europe Geographical split (number of licenses in brackets) 332 clearing licenses in 16 European countries Finland (1) More than 6.7 million cleared derivatives contracts daily 545 Non-Clearing Members Ireland (1) UK (82) Denmark (2) Netherlands (15) Belgium (2) Luxembourg (10) France (16) Switzerland (36) Germany (134) Austria (16) Clearing Fund size of EUR 1.4 bn Portugal (1) Spain (10) Margin collateral of EUR 48 bn under management Italy (3) Malta (1) Greece (1) EUR 228 bn notional outstanding in Eurex Repo 1 All figures

4 An integrated service offering with broad product and service scope is key for efficiencies Lending CCP available since November 2012 First bilateral model in Europe EUR 229bn notional outstanding in May 2013 Securities Lending Repo/ GC Pooling Commodity & others Bonds Dividend Eurex Clearing Equity Equity Index Interest Rate Credit Bund BOBL Schatz Futures & Options Swaps European market leader in long-term interest rate futures and options 2.2mn contracts with a notional of EUR 285bn cleared every day Production started on 13 Nov 2012 Deutsche Boerse also offers trade reporting through REGIS-TR and TREMIR, as well as integrated collateral management through Clearstream Banking 4

5 Agenda Introduction to Eurex Clearing Segregation models overview Eurex Clearing s client asset protection services Individual Clearing Model Omnibus Clearing Models 5

6 EMIR Segregation requirements for CCPs and Clearing Members are defined and details are specified by ESMA After the Lehman and MF Global defaults, the demand for segregation increased as clients have faced issues around uncertainty of porting, double funding, mutualisation of client and Clearing Member (CM) risks from comingling of assets and potential misuse of client collateral EMIR article 39 requires CCPs and Clearing Members to offer at a minimum omnibus and individual segregation models EMIR Article 39 will: not permit models which do not segregate in separate records and accounts positions and assets (defined as collateral held to cover positions) of clients from the Clearing Member not permit netting of positions recorded on different accounts (i.e. separate difference claims are required for proprietary and client accounts) not permit collateral recorded in an account to be exposed to losses in another account But Clearing Member initial margin can be used to cover loses on a client account ESMA provided clarity that individual client segregation requires that the actual assets of the client are segregated and available for porting. Models which merely segregate the value of collateral due to the accounts of clients, 'do not meet the requirement to offer individual client segregation Some local investment laws require asset managers to segregate assets at the fund level to prevent co-mingling of positions and assets between the clearing broker, other clients and funds of the same fund company Both buy-side and sell-side clients are requesting protection from additional risks including transit and liquidation risk 6

7 Eurex Clearing s overview of omnibus and individual client segregation models according to EMIR Article 39 Clearing Member Proprietary Business Client Business Proprietary 39(2) Omnibus Client Segregation 39(3) Individual Client Seg Proprietary positions Undisclosed client positions NCM 1 positions RC 1 positions NCM 2 positions RC 2 positions Margin requirement Margin requirement all clients Margin requirement NCM 1 Margin requirement RC 1 Margin requirement of NCM 2 Margin requirement of RC2 Proprietary collateral account Collateral for Client omnibus segregated account/ Collateral allocation by value in proprietary account NCM 2 collateral pool RC 2 collateral pool Elementary Omnibus Clearing Model UK CASS Omnibus Clearing Model Individual Clearing Model Definitions NCM Non-Clearing Member RC Registered Customer 7

8 Overview of currently available markets and jurisdictions for Eurex Clearing s EMIR segregation models Markets* CM Jurisdictions Client Jurisdictions Fund Jurisdictions Elementary Omnibus Clearing Model UK CASS Omnibus Clearing Model Individual Clearing Model** All (excluding SecLending) Eurex Exchanges OTC Derivative Transactions European Energy Exchange European-based Clearing Members UK Clearing members who offer CASS protection to their clients All Germany England & Wales Scotland France Ireland Luxembourg Spain Any Any Any Any Germany England & Wales Scotland France Ireland Luxembourg Spain The Netherlands Belgium Germany*** England & Wales*** Ireland Luxembourg *All markets includes Eurex Exchanges, Eurex Bonds, Eurex Repo, Frankfurter Wertpapierbörse, Irish Stock Exchange, European Energy Exchange, OTC Derivative Transaction and Securities Lending Transactions **Under the Individual Clearing Model, legal analysis has to be completed per CM jurisdiction and the client or fund jurisdiction to ensure that the model would operate as envisaged. Please contact us for the latest available combinations of CM and client or fund jurisdictions. Additional jurisdictions will be considered based upon market demand ***For OTC markets only 8

9 Individual segregation EMIR 39(3) Omnibus segregation EMIR 39(2) Client Asset Protection Assessment of segregation and porting under EMIR Characteristics, risk profile, operational complexity and porting likelihood per model Margin DC*** Segregation Porting Risk Operational simplicity Capital charge* Eurex Clearing services Pos Coll Fellow Customer Liquidation Replacement Transit Net Allocated value/asset 4 % LIVE** Elementary Omnibus & UK CASS Omnibus Gross incl. excess Allocated value Allocated asset 4 % In development Eurex Clearing will implement a LSOC with excess model Gross Individual physical custodian account Tagged asset 2 % 2 % LIVE Individual Clearing Model Very likely None Easy Unlikely High Complex This overview represents Eurex Clearing s own models and its view of the model characteristics *Subject to an open consultation and final rule making in Basel III **The Elementary Omnibus Clearing Model is live today and will be amended during December 2013 to implement legal changes to fulfil EMIR segregation and portability requirements. The UK CASS Omnibus Clearing Model is live. *** Difference Claim 9

10 Agenda Introduction to Eurex Clearing Segregation models overview Eurex Clearing s client asset protection services Individual Clearing Model Omnibus Clearing Models 10

11 Individual Clearing Model: Best in Class Client Segregation Individual Clearing Model Eurex Clearing launched the Individual Clearing Model in August 2011 and has made significant investments to enhance collateral management to realise scalable efficiencies, which has fed through to significant client demand. The ICM is currently being used by German and Dutch clients through German and UK Clearing Members. There are 4 UK clients and a Belgium client currently on-boarding with and we have seen a marked uptick in client interest, particularly given the OTC IRS fee-waiver and the latest ESMA Q&A Legal model is based upon a double title transfer collateral arrangement and security interests to allow Eurex Clearing to deal directly with a client following insolvency of the Clearing Member Documentation: Market standard client clearing documentation, such as the ISDA/FOA, FOA or the German Banking Association, or the Clearing Member s proprietary documentation may be used in conjunction with Eurex Clearing s ICM Annex. The client is required to enter into a Participation Agreement with Eurex Clearing. Alternatively, Eurex Clearing s triparty agreement may be used with any client documentation. Porting: Immediate porting is available upon default. The client would receive their actual segregated collateral and upon default have a range of porting options to suit individual client requirements RC 1 positions Margin requireme nt of RC 1 RC 1 collateral account Positions accounts Individual positions accounts per client Clients may be a legal entity (for example, a bank or broker-dealer offering indirect client clearing), or the client can be a fund manager, a fund itself, or a fund segment Margin Requirement The margin calculation is performed per client. Clearing Members will receive individual margin reports, cash payments will be netted Collateral A client may opt for full physical segregation where they hold a sub-account at the CSD for their benefit, or a CM can use asset tagging, where an omnibus sub-account which is held for the benefit of all clients and assets are tagged and individually booked for the client at the CCP level 11

12 Safety Client Asset Protection Individual Clearing Model Eurex Clearing s Individual Clearing Model provides highest level of safety to clients Value proposition Full asset protection Portability of client assets Protection of the actual assets provided to us by either the CM or client Higher protection than individual segregation by value or omnibus accounts Individual account protection down to underlying funds or fund segments Robust legal construct Client choice to port or become an Interim Participant Porting without liquidation or replacement risk Direct delivery Removal of transit risk Securities can be delivered to separate physical accounts at the CSD or tagged To be implemented in November 2013 Timely transfers of cash and securities CM contractually required to pass through non-cash collateral without delay Book entry transfers of cash between CM account and client account Legal documentation Robust legal model with available legal opinions for CMs Agnostic client documentation approach Oliver Wyman 12 12

13 Efficiency Client Asset Protection Individual Clearing Model New features available to increase efficiency and scalability for clearing members and clients Value proposition Collateral operations Rather than maintaining a physical CSD account per individually segregated clients, CM s can maintain one omnibus account at the CSD for the benefit of each individual client through asset tagging. Large eligibility schedule Over 25,000 eligible securities (governments, corporates, equities) Can be used for Initial Margin and Clearing Fund Central Bank eligible securities reduces liquidity risks for CCP in event of CM default Capital efficiencies Clients look-through to CCP under CRR/CRD IV Risk weight of 2 percent for both CM and the client (bank) Book entry cash CM can perform book only cash transfers between the firm and client account Increases operational efficiency, reduces transit risk, avoids fees Cash cut-off times Return of EUR and CHF until late afternoon (to be implemented November 2013) CM s receive back cash intraday on receipt of client securities/risk reducing trades Collateral transformation CM has flexibility to provide collateral transformation services Client receives full suite of position and collateral reports from Eurex Clearing Oliver Wyman 13 13

14 Eurex Clearing documentation on-boarding options for the ICM Documentation CM Client Available Documentation Eurex Clearing Available Netting opinion requirement Available Comments 1 Any documentation can be used (e.g. CRV, FOA, ISDA, proprietary) Eurex Clearing Triparty agreement (ECD) None n/a Ready for on-boarding* 2 Proprietary Clearing Member Documentation CM Participation Agreement (CCD) Proprietary netting opinion Extention opinion** CM CM Please approach Eurex Clearing to discuss individual approach 3 ISDA/FOA Client Clearing Addendum Eurex Clearing Annex Participation Agreement (CCD) ISDA Netting opinion WIP Timeline industry dependent Onboarding can start Admission subject to availability of netting opinion OTC only 4 FOA Client Clearing Module WIP Sept 2013 Eurex Clearing Annex Participation Agreement (CCD) WIP*** FOA Netting opinion WIP Expected Nov 2013 Onboarding subject to finalisation of FOA doc and Eurex Annex Admission subject to availability of netting opinion Listed & OTC 5 Clearing Rahmenvereinbarung (CRV) Eurex Clearing Annex Participation Agreement (CCD) WIP**** CRV Netting opinion WIP Timeline industry dependent Onboarding can start Admission subject to availability of netting opinion CM WIP Individual Assessment per Clearing Member Work in progress * Assuming tri-party agreement prevails over CM client documentation in CM default ** CM s legal counsel to confirm compliance of proprietary documentation with Eurex Clearing requirements as outlined in the clearing conditions *** Eurex Clearing s Annex will be provided shortly after the final FOA Module is published **** Eurex Clearing s Annex will be final shortly after the final CRV netting opinion is available 14

15 Agenda Introduction to Eurex Clearing Segregation models overview Eurex Clearing s client asset protection services Individual Clearing Model Omnibus Clearing Models 15

16 Omnibus Clearing Models Elementary & UK CASS Omnibus Clearing Models Eurex Clearing historically offered separate client position accounts for position maintenance, accounting and recording purposes but required the Clearing Member to provide its own collateral to cover those positions. Under EMIR, Eurex Clearing will also be required to record the value of collateral covering the positions separately and calculate a separate Difference Claim. Amended Clearing Conditions will be published in November 2013, reflecting these amendments and Eurex Clearing will implement functional changes at the Clearing House level during December Despite these changes, Clearing Members will not be impacted unless the Clearing Member opts to have an additional sub-account at the CSD level for collateral covering client positions Legal model is based upon transfer of title in cash and a pledge of securities from Clearing Member to Eurex Clearing Any documentation may be used Porting is not likely, but a separate Difference Claim will be created Undisclosed client positions Omnibus Client Segregation NCM 1 positions RC 1 positions The UK CASS Omnibus Clearing Model is functionally the same as the Elementary model, but the Difference Claim would be protected under the UK Client Money Trust. Positions accounts Omnibus position account for non-disclosed clients Individual clients may adopt this model (from any jurisdiction) and have segregated positions from other clients but not collateral (see the ICM model) Margin requirement all clients Margin requirement NCM 1 Margin requirement RC 1 Collateral for Client omnibus segregated account/ Collateral allocation by value in proprietary account Margin Requirement The margin calculation is performed per position account. Clearing Members will receive individual margin reports, but payments will be netted Collateral Elementary Clearing Model collateral can be held in the CM s main pledge account or in a separate sub-account for the benefit of clients UK CASS Omnibus collateral held in a separate sub-account at the CSD 16

17 Omnibus Clearing Model LSOC with excess proposed model Eurex Clearing is developing a clearing model that would adopt the general principles of the legally separated operationally commingled (LSOC) with excess clearing model being developed in the US, for the European market. This would build upon CM s operational process to implement a further value-based gross segregation and porting model that would be cost effective and operationally scalable. Eurex Clearing is aiming to implement this model during 2014, which will initially be launched for OTC markets only. Legal model: is based on title transfer collateral arrangements LSOC with excess Documentation: market standard agreements can be used P1 RC1 A1 P1 RC2 A1 Porting is more likely to occur because gross margin, including excess, is held by Eurex Clearing, but only the value is protected (i.e. omnibus client segregation under EMIR) MR MR MR CSV 1 CSV 2 LSOC with excess Pool 1 Client 1 Excess Pool Client 2 MR Excess Pool Positions accounts Individually segregated positions accounts Margin Requirement MR is calculated separately for every position account Margin calls will be the sum of the margin requirement per account for all LSOC with excess clients in one pool Collateral A clearing member can have multiple LSOC with excess collateral pools Each pool must be covered for the sum of all clients (in that Omnibus Pool) margin requirements Client Segregated Value (CSV) can be maintained per client by file upload CM can deposit/withdraw Client Excess collateral and is not required to provide a file as one client will have one dedicated client excess collateral pool 17

18 Eurex Clearing provides support to address the most acute EMIR implementation issues faced by Clearing Members Clearing Member dependencies on CCPs Disclosure Testing STP rates Client take-up and documentation CCP interpretations Eurex Clearing response Supports the FOA market standard disclosure document and will engage with the project once we have received completeness confirmation on our EMIR application from the regulator Test environments are available and operating today for the ICM & CASS Omnibus Clearing Models. The Elementary Omnibus Clearing Model is being modified but full disclosure about the implementation has been shared (& functional changes on the CM level are not required). E.g. bilateral meetings with CMs occurred in Jun-August. 13 September, legal meeting for the extended UK dealer-group Eurex Clearing has implemented and will implement a number of collateral enhancements to make the ICM scalable, and has developed a collateral roadmap to include an API and quad-party solutions during 2014 Whilst Eurex Clearing has live clients and an increase in demand for the ICM, most clients want to use market standard documentation. Eurex Clearing is ensuring that the ICM is compatible with the market standard documents and that these can be utilised upon receipt of a netting agreement produced by the relevant trade associations Where relevant, Eurex Clearing has provided detail about our interpretation of EMIR. For example, we interpret excess to amount to any excess on the CCP level of an individual client. Under the ICM, both variation and initial margin are protected Eurex Clearing offers immediate and full on-boarding support to facilitate compliance of Clearing Members with EMIR requirements in time with Eurex Clearing s reauthorisation under EMIR Oliver Wyman 18 18

19 Appendix 19

20 Application process Client Asset Protection Eurex Clearing has submitted its application for reauthorisation as central counterparty under EMIR on 1 August 2013 Status Eurex Clearing Eurex Clearing has submitted its application for re-authorization as CCP under EMIR to its national competent authority, BaFin, on 1 August 2013 From this date on, BaFin has 30 working days to conduct a completeness check Final decision from BaFin about granting or refusing authorisation is expected in Q EMIR - Timeline Timeline - Application process for Eurex Clearing Jul Aug Sep Oct Nov Dec Jan Feb Mar Submission of application to BaFin by Eurex Clearing Completeness check by BaFin BaFin deems the application complete Establishment of college BaFin conducting a risk assessment of Eurex Clearing College to reach joint opinion BaFin decides on authorisation and writes explanation Authorisation or refusal of the application 30 WD 30 CD Submission of application by Eurex Clearing = Ifapplication is deemed incomplete a new deadline will be set by BaFin 4 months 30 CD 1 month Timeframe in which BaFin has to inform ECAG of its decision 6 months WD = Working Days CD = Calendar Days Process steps triggered by Eurex Clearing Process steps triggered by authorities 20

21 High level comparison of segregation models Main Features Elementary Clearing Model UK CASS compliant Omnibus Model Individual Clearing Model Position accounts Positions are held on separate position accounts Positions are held on a UK CASS omnibus account Positions are held on individually segregated accounts Margin requirement The margin requirement in is calculated net for all omnibus clients The margin requirement in the UK CASS omnibus account is calculated net for all omnibus clients The margin requirement of a segregated client is covered by a dedicated collateral pool, which only holds collateral for the purpose of the specific client Collateral management Collateral is allocated to proprietary and client positions Collateral is held for a group of clients, i.e. cannot be assigned to individual clients Two alternatives for operational implementation: 1) By value: one collateral pool (cash and securities) with pro rata allocation by value to proprietary and client positions automatically in the Eurex Clearing System based on margin requirements 2) By asset (sub)account/pool ID)): Allocation of cash collateral by the CM through unique identifier (pool ID). Allocation of securities collateral by the CM via SWIFT instructions to CBF/SIX SIS Ltd./CBL account The securities collateral account remains within the account structure of CM Collateral is allocated to the UK CASS omnibus account Collateral is held for a group of clients, i.e. cannot be assigned to individual clients The securities collateral account remains within the account structure of the CM Securities collateral is allocated by the CM via SWIFT instructions to CBF/SIX SIS Ltd/ CBL account Cash collateral is paid from the account of the CM. There is a unique identifier (pool ID) indicating the respective client displayed on the reports Collateral is held on individually segregated accounts Collateral is held segregated for single clients, i.e. every client is assigned his own collateral The securities collateral account remains within the account structure of the CM from an operational perspective and is clearly labelled to hold collateral for the purpose of the segregated client Cash collateral is paid from the account of the CM. There is a unique identifier (pool ID) indicating the respective client displayed on the reports Client type Clients can be either undisclosed in the Agency a/c or become an RC / NCM. Clients can either be undisclosed in the A9 a/c or become an RC/NCM. Clients are disclosed to Eurex Clearing. 21

22 High level comparison of segregation models Main Features Elementary Clearing Model UK CASS compliant Omnibus Model Individual Clearing Model Risk weight 4% subject to final rules 4% subject to final rules 2% subject to final rules Legal agreement Any documentation can be used Agreement on CM level with client(s) required Eurex Clearing-CM-NCM/RC conclude tripartite agreement Any documentation can be used Agreement on CM level with client(s) required Eurex Clearing-CM-NCM/RC conclude tripartite agreement Market standard documentation available Tripartite agreement for ICM (Eurex Clearing-CM-NCM/RC) In case of ICM for funds (flexible account structure): Segregation applies on individual fund level System access for the client No system access for clients or RC required. No system access for clients or RC required. NCM: Full access required RC: Optional access, but CRE mandatory. Legal structure/ provision of collateral Collateral is allocated as proprietary or client collateral. Title transfer of cash and pledge of non-cash collateral to Eurex Clearing. Title transfer of cash and pledge of non-cash collateral to Eurex Clearing. Double title transfer. Portability One Difference Claim is calculated for all clients Available if all clients agree to be ported and a single alternative CM accepts the transfer. One Difference Claim is calculated for all clients Portability is available for the UK CASS omnibus net a/c where all clients agree to be ported and a single alternative CM accepts the re-establishment. One Difference Claim is calculated/client Full portability of positions and collateral; Upon fulfillment of prerequisites: 1) Interim Participation (NCM/RC) or 2) Immediate transfer via reestablishment under a new solvent CM. Protection CMs provide collateral to cover client and proprietary positions. The UK CASS omnibus net collateral is protected at the CCP level. Maximum protection of client positions and collateral under a robust legal construct. Status ECM is live, and will be modified to implement EMIR by year-end Live Live 22 22

23 ECAG offers a variety of services to guarantee optimal usage of provided collateral Fixed income in EUR Fixed income in CHF Equities ECB eligible marketable assets ECB liquidity classes I-IV Exchange listing and price (except bills) Types of securities Government and short term issues (Bubills) bonds State issues City and municipality bonds State agencies Corporates and other bonds Bank bonds Swiss National Bank (SNB) Repo eligible Exchange listing and price Types of securities Federal bonds and bills (GMBF), loan obligations Kantonal obligations, bonds, bills (GMBF) City and municipality bonds State agencies Corporates and other bonds Bank bonds, mortgage bonds (Pfandbriefzentralen), no ABS EUR-denominated DAX, EURO STOXX 50 constituents DAX Ex products, ishares EURO STOXX 50 Other stocks as announced by ECAG CHF-denominated SMI constituents XMTCH on SMI products Other stocks as announced by ECAG Fixed Income in foreign currencies Cash Other Government Bonds in USD, GBP, DKK, NOK, SEK, AUD, CAD, JPY EUR, GBP, USD, CHF Xetra Gold Certificates denominated in EUR Exchange listing and price 23

24 For cash collateral the following currency specific timelines apply In general Eurex Clearing is restricted by the availability of the respective payment infrastructure for the cash deposits Deadline for cash release Last instructions by Eurex and deadline for cash deposits via fax 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 CET Eurex Opens 9:30 Target2 for EUR 14:00 17:30 SIC for CHF 13:15 13:30 SIC for CHF (instructions will be under the value date T+1 Euro SIC for EUR Euro SIC instructions will have value date T+1 CHAPS for GBP 16:15 16:30 CHIPS for USD 20:45 21:00 Deadline for cash deposits via GUI 24

25 Clearing Member jurisdiction Client Asset Protection Individual Clearing Model Overview of jurisdictions Client jurisdiction (RC/ NCM) DE EN&WA FR NL IE LU SC ES BE AU - Analysis to be completed during Q4 2013** FI CH* Additional jurisdictions will be considered based upon market demand Available - Not yet considered, consideration subject to market demand * Issues with Swiss national law have been observed, solutions under assessment ** Availability subject to legal feasibility 25

26 Clearing Member jurisdiction Client Asset Protection Individual Clearing Model Overview of fund jurisdictions Client jurisdiction (Funds) DE EN&WA IE LU FR NL*** CH** * Q4 - Q4 - DE Kapitalanlagegesellschaften acting for investment funds (Sondervermögen) * * Q4 Q4 Q4 EN&WA OEICs, AUTs * * Q4 Q IE CCFs, Unit Trusts, Investment Companies, Investment Limited Partnership Q4** LU FCPs, SICAVs, SICAFs Q4 - Available Analysis started; completion expected by end of Q4**** Not yet considered, consideration subject to market demand Additional jurisdictions will be considered based upon market demand**** * Only possible for OTC IRS ** Porting or direct payment to client likely subject to FINMA approval in case of a Swiss CM insolvency (under current Swiss Insolvency law) *** Where the legal entity is an investment firm. Other fund types to follow in Q4 **** Availability subject to legal feasibility 26

27 Individual Clearing Model alternatives in a default situation The handling of segregated and non segregated clients after close-out netting There are three options an NCM/RC can choose from: Individual Clearing Model A. to receive a final pay out of the cash settlement amount; the liquidation process begins B. Immediate re-establishment under new relationship (back up Clearing Member) C. to become an Interim Participant and have the positions and collateral be transferred to a technical clearing member ID Valuation Day Valuation Day + 1 Valuation Day + 2 Valuation Day + 3 Valuation Day + 4 Valuation Day :00 22:30 CET Pay out A Close-out netting of positions Immediate re-establishment B Interim participation C Assumption: If the trigger event is identified prior to 17:23 CET, valuation day equals termination date. If the trigger event is identified after 17:23 CET, Valuation day is D+1. 27

28 Individual Clearing Model Interim Participant solution Transfer of client positions and collateral via the unique Interim Participant status An individually segregated NCM/RC has, in the event of its CM s default, the possibility to become an Interim Participant. Characteristics The interim period can last up to 5 business days and can be extended by Eurex Clearing. The IP is assigned to a technical CM ID in the Eurex system. The Interim Participant may only execute trades on a restricted basis as outlined in the Clearing Conditions. If the Interim Participant doesn t fulfil its obligations during the interim period Eurex Clearing can suspend it according to the Clearing Conditions with immediate effect and start the close-out netting. The same happens after the interim period and if no new Clearing Member was found. Eurex Clearing does not have the power to enforce a transfer to a non-defaulting Clearing Member. Legal requirements All outstanding payments related to the positions reopened. Sufficient coverage for any margin shortfall. Coverage of Clearing Fund contribution for the interim period. Confirmation of its financial solvency and technical ability to maintain its position. ECAG ECAG ECAG CM old NCM/RC Close-out Netting Close-out Netting IP Interim participation Max. 5 day period CM new NCM/RC 28