Single Order Book & derivatives clearing

Agreement requests between derivatives Members and Cash agents

Within the frame of the Single Order Book (SOB) project, derivatives clearing Members must confirm or designate a cash agent on all the three NYSE Euronext’s cash trading markets in Paris, Brussels and Amsterdam.

Any trading Member or clearing Member currently active on a cash financial market can be a cash agent.

The cash agent that manages trades resulting from the exercises and assignments of equity options for a derivatives clearing Member, can be the same for all three markets or can be different for each market.

Example of a derivatives clearing Member active on the Paris derivatives market only:

General context:

LIFFE’s multi traded equity options remain multi traded after SOB.

The underlying security of a multi traded equity option becomes mono traded.

Example:

• The equity option classes on FORTIS are: “FOR” on Amsterdam and “FRB” on Brussels derivatives markets. The underlying security will be the security BE0003801181 FORTIS tradable on the Brussels cash market only (to be confirmed by NYSE Euronext).
• The options contracts cleared on the Dutch derivatives clearing segment will be exercised on the Brussels cash market.
• Therefore, the clearing Member on the Dutch derivatives clearing segment will have to designate a cash agent on the Brussels cash market to process the trade.

LCH.Clearnet will send a document to derivatives clearing Members which will include a solution of cash agents that would be parameterised on all three markets, based on existing links between cash agents and derivatives clearing Members.

Members will have to inform LCH.Clearnet if the proposed solution is satisfactory or if they would prefer a different one.

Example:

On the French cash market, the cash agent XXX manages the trades of the derivative clearing Member YYY.
For YYY:

• XXX can already manage trades which come from the exercise or assignment of the AIR FRANCE* “AF1”/”AF2”.

• XXX will be parameterised on the French cash market in order to manage trades coming from the exercise or assignment of the AIR FRANCE Dutch class option: “AFA”.

*assuming that the market of reference of the underlying AIR FRANCE security is Paris LCH.Clearnet is preparing pre-filled forms for each derivatives Member that would not have a cash agent on the three markets.

Derivatives clearing Members will be requested to:

• Complete and sign the forms.
• Obtain the cash agents’ signed approval.
• Return the fulfilled forms to your LCH.Clearnet SA product implementation manager.
• The deadline for returning forms is the end of September 2008.
• To facilitate the process of obtaining signatures between parties, the forms can be exchanged and returned by e-mail or fax.

LCH.Clearnet plans to send the pre-filled forms by early July 2008.

For further information, please contact:
your LCH.Clearnet SA product implementation manager:
Christophe Robert: +33 1 70 37 67 08, christophe.robert@lchclearnet.com
Joelle.Devars: +33 1 70 37 65 85, joelle.devars@lchclearnet.com
or your local relationship manager
or the Membership department: +33 1 70 37 67 60, lchclearnetsa_membership@lchclearnet.com

Customer Relationship Management LCH.Clearnet SA 

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