C7 Release 8.0: Updated scope

1.   Introduction

With this circular, Eurex Clearing announces:

• the removal of the Corporate Action harmonization processing from the C7 Release 8.0 scope,
• the value date change from T+2 to T+1 for cash settlements as a result from exercise/assignments of equity options with fractional trading units will take place with the introduction of C7 Release 8.0.

As announced in Eurex Clearing Circular 048/21, C7 Release 8.0 will be launched in production on 22 November 2021 and has been available in simulation since 20 September 2021.

Eurex Clearing follows a recommendation of the Derivatives Clearing Committee to postpone the announced Corporate Action harmonization processing of fractional trading units until further notice.

Simulation start:  20 September 2021
Production start:  22 November 2021

Learn more about C7 Release 8.0 on our dedicated initiative page under the following link: Support > Initiatives & Releases > C7 Releases > C7 Release 8.0.

System documentation, circulars, timeline and much more information are available there for you.

2.   Required action

Please prepare for the Release and make sure that all your Release Contacts have subscribed for Eurex Clearing Circulars and Newsflashes on the Eurex Clearing website under the following path:

Find > Subscriptions

We encourage Clearing Members to participate in the simulation phase. Clearing Members are requested to submit their Readiness Statement by Friday, 12 November 2021.

3.   Details of the initiative

As per this circular, Eurex Clearing will not implement the new Corporate Action harmonization behavior by which the adjustment of the trading unit will result in a lot size rounded to the nearest whole share and a respective premium adjustment processed at the point of the corporate action.

Until further notice, Eurex Clearing will continue with the current behavior whereby an adjustment of the trading unit can result in a lot size with fractions (up to 4 decimals).

Consequently, the cash settlement of fractional trading units is still triggered by exercises and assignments (as today). However, the resulting cash adjustment will be processed directly by C7 starting with C7 Release 8.0. Hereby, the value date for this type of cash adjustments will change from T+2 to T+1 and data will be included in the Report CD710 “Daily Cash Account CM” (which will be available mid-October 2021).

Please note that the Report Reference Manual and modification notes documentation will not be updated as the functional changes will be implemented at a later stage.

The Release Notes will be updated in the next days on the Eurex Clearing website under the following link: Support > Initiatives & Releases > C7 Releases > C7 Release 8.0 > Overview & Functionality.

All other items of C7 Release 8.0 remain in scope. In order to test this new processing, we recommend Clearing Members to perform exercises in contracts with a fractional trading unit and/or cash settled flexible equity options.

Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the Clearing Conditions or FCM Clearing Conditions of Eurex Clearing AG, as applicable.

Further information