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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.

The use of guarantees will reduce the amount of cash or other collaterals and thus save liquidity cost.

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.

To use bank guarantees as collateral,

  • please contact one of the following guarantors and use the template “Template Guarantee NCM EUR”* or “Template Guarantee NCM GBP”* respectively.
  • please contact your Clearing Member to give approval for the use of the bank guarantee by using the  “Form O08” published below.

* The NCM will then have the possibility of either (i) contacting the guarantee giving bank directly or (ii) indirectly with a correspondence bank, e.g. to contact its principal bank, which then contacts one of the Institutes approved by ECC out of the following list. The guarantee giving bank remains an ECC accepted institute. ECC does not have any influence on fees incurred with banks involved.

Bank Guarantee for DCP Clearing Member (DCP CM)

To cover the limit DCP CMs can only provide trading participant collateral as defined in article 3.5.10 and 5.1.2 of ECC’s Clearing Conditions.

To use bank guarantees as collateral,

  • please contact one of the following guarantors and use the template “Template Guarantee DCP CM EUR”* or “Template Guarantee DCP CM GBP” respectively.

More details on risk management for DCP CMs can be found here.

The template has been developed with the feedback of the following guarantors, which fulfill ECC’s criteria:

Guarantor

Contact



Commerzbank AG
Mittelstandsbank
Commerzbank Transaction Services
60261 Frankfurt am Main
Germany

Hans Henrich Holdinghausen
Supervisor Trade Services

Phone: +49 69 136 - 89322
Fax: +49 69 136 - 85413
E-mail: hans.holdinghausen@commerzbank.com

Coöperatieve Rabobank U.A.
Croeselaan 18
3521CB Utrecht
the Netherlands

Boudewijn Jongeneel
Senior Consultant Transaction Banking

Phone: +31 30 2164062
E-mail: Boudewijn.Jongeneel@rabobank.nl



NORD/LB
Norddeutsche Landesbank Girozentrale
Friedrichswall 10
30159 Hannover
Germany

Norbert Paul
Relationship Management Corporate Banking

Phone: +49 511 361-4231
E-mail: norbert.paul@nordlb.de



Landesbank Baden-Württemberg
Am Hauptbahnhof 2
D-70173 Stuttgart
Postfach 10 60 49
70049 Stuttgart
Germany

Phone: +49 711 127-0
Fax: +49 711 127-43544
E-mail: kontakt@LBBW.de

Helaba
Landesbank Hessen-Thüringen
MAIN TOWER
Neue Mainzer Strasse 52-58
60311 Frankfurt am Main
Germany


Holger Peter
Vice President
Structured Trade & Export Finance

Phone: +49 69 9132 26 58
Fax: +49 69 9132 8 26 58

DZ BANK AG
Deutsche Zentral-Genossenschaftsbank AG
Frankfurt am Main Platz der Republik
60325 Frankfurt am Main
Germany

Brigitta Engelhard
Phone: 49 69 7447 92134
E-mail: brigitta.engelhard@dzbank.de

  

Banks interested in becoming a guarantor for ECCs collateral management service should contact ECC directly via email clearing@ecc.de. ECC will then review and decide upon the acceptance of new guarantors based on ECCs risk assessment and the fulfilment of ECC’s minimum requirements.

Currently, ECC only accepts bank guarantees nominated in Euro. The extension to other currencies is intended and will be communicated in due course.

Consideration regarding EMIR:

EMIR Article 41 requires that a CCP shall impose, call and collect margins to limit credit exposure resulting from the relevant positions. According to Article 46 such exposure must be covered with highly liquid collateral with minimal market and credit risk. Highly liquid collateral is defined in Annex I to Regulatory Technical Standard 153/2013. Spot Market Initial Margin Requirement is not designed to cover risk from existing positions but from potential credit exposures from potential transactions on spot markets. Therefore, the limitations of Annex I do not apply for spot market initial margin. Furthermore, as in the spot market approach of ECC, transactions are concluded between ECC and the NCM under a guarantee of the CM, the collateral posted by NCM’s to ECC is backed by this guarantee of the CM realizable on a same day basis.

Forms

Form     Download
EnglishGerman
Form O08 (NCM)PDF
Template Guarantee NCM EUR           PDFPDF
Template Guarantee NCM GBPPDFPDF
Template Guarantee DCP CM EURPDFPDF
Template Guarantee DCP CM GBP

PDF

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