Bank Guarantees as Collaterals

Bank Guarantee for Non-Clearing Member (NCM)

To cover Spot Market Initial Margin Requirements ECC accepts Bank Guarantees that fulfill certain criteria. Bank Guarantees cannot be used to cover any other margin requirements.

The value of the Bank Guarantee will be recorded as margin credit reducing the Spot Market Initial Margin Requirement. The Bank Guarantee can be called by ECC to cover all overdue payment obligations of a NCM for spot market transactions settled at ECC. Both the CM and ECC are beneficiaries of the guarantee. The CM remains liable for all financial obligations resulting from the spot market transactions of his NCMs.

ECC will apply concentration limits for Guarantors on CM and ECC level. On CM level the total value of all guarantees per guarantor shall not exceed 20% of the required margin. An absolute limit for the total value of all guarantees per guarantor will be determined by ECC. The concentration limits are allocated on a first-come first-serve basis.

Bank Guarantee for DCP Clearing Member (DCP CM)

DCP Clearing Member (DCP CM) may provide bank guarantees as trading participant collateral the cover the limit set by ECC as defined in ECC’sClearing Conditions.

ECC accepts bank guarantees in EUR and GBP.

A financial institution needs to be admitted as a guarantor at ECC before a bank guarantee provided by such financial institution can be accepted by ECC.

ECC will apply concentration limits for Guarantors on Settlement Bank level and DCP CM level. On Settlement Bank Level bank guarantees from a single guarantor are limited to 20% of the trading collateral amount of all DCP CM under one Settlement Bank. On DCP CM level, bank guarantees can only cover the full amount of the trading collateral amount up to a collateral amount of 40 MN EUR. Amounts exceeding this threshold have to be covered by at least 50% via cash collateral.

For more information viewCollateral Management-Bank Guarantees.