what’s next? 32December 2013ABN AMRO Clearing Newsletter for clients

2

Thank you!

As has already been well documented, 2013 has been a

very challenging year for the industry, and one where we at

ABN AMRO Clearing have learnt a lot about ourselves as an

organisation. One thing that has remained constant is our

loyal client base. You are the reason we exist today and your

continued support is greatly valued.

And it is that support that recently resulted in ABN AMRO

Clearing receiving the 2013 “FOW Proprietary Traders

Clearing Firm of the Year” award. We are very proud to have

received this reward and it gives us huge satisfaction, as

this award is voted by the professional trading group

community, you, our clients.

In addition, we have also received valuable feedback from a

number of you in our clearing survey for 2013; later in this

edition we talk further about the results. We also recently

held our internal customer experience week. This is an

annual programme held simultaneously in all our offices

around the globe and the focus is maintaining the aware-

ness amongst all members of staff of creating the best

possible experience for our clients. Some of you were

present in these programmes, explaining your business

models, your experiences with ABN AMRO Clearing and

again providing valuable feedback that we need and use to

make you globally competitive. So thank you. Thank you for

your business, thank you for your continued support and

thank you for your time. It really is greatly appreciated and

has made 2013 an overall success

We will also give you updates on our third Amsterdam

Investor Forum that ABN AMRO Clearing will be hosting

again in Amsterdam on the 12th of February, regulatory

updates and also an interview with Rhyne Williams who

you were introduced to in the last edition of What’s Next.

So enjoy the read and it just leaves me to wish all of you

and your families a very Merry Christmas and a happy and

prosperous 2014.

James Egan

Head of Relationship Management Europe

ABN AMRO Clearing

intro

3What’s Next

Long-term partnerships 4

Shark II 6

EMIR 7

Rhyne Williams 9

FOW Award 11 Amsterdam Investor Forum 2014 12

Quarterley update 13

Event calender 18

content

4

Long-term partnerships, that’s how we prefer to name the

relationships we have with our clients. And we all know

that relationships are something you should work for on a

permanent basis. Here within ABN AMRO Clearing we

started to organise a number of recurring events, with all

the staff participating, to keep the relationships with our

clients healthy and strong and lift the partnership to an

even higher level.

Two of those recurring events within ABN AMRO Clearing

are the annual Clearing Survey and the Customer Experi-

ence Week (CEW). With the Clearing Survey our clients

get to rate us as a service-provider and in this way we

receive an enormous amount of valuable feed-back each

year. These precious views are then used in client calls, to

dig for the pain and where possible find relief in adjusting

the way we interact with our client.

The client feed-back is also used to challenge the

colleagues involved. This happens in the CEW, another

annual program organised simultaneously across all the

offices of ABN AMRO Clearing where every staff member

is encouraged to actively participate at 2-hour sessions in

4 consecutive days.

The focus of the CEW is our clients and the service and

experience we give them; what do we do for them; what

do they expect from us as an organization; how can we

improve our service so that these clients are more satis-

fied and do our efforts contribute to making our clients

globally competitive?

Coming back to the customer satisfaction survey, this

year’s edition was the fifth since 2006. The aim of the

survey is threefold:

▶ to measure customer perception of our performance;

▶ to gain a better understanding of how our products and

services are rated in the market;

▶ to better align our strategy with our customers’ needs

and expectations.

We received over 200 responses to this year’s survey

which equals last year’s amount.

The average score awarded when customers were asked

to give their ‘overall opinion of our services’ was 5.7, on a

scale of 1-7 (compared tot 5.5 for the year 2012). Which

means that our customers rate our overall standard of

service as either good or very good and it even slightly

improved compared to the 2012 results.

New to this year’s survey was the question ‘Would you

recommend us to a peer?’. And we were very pleased to

learn that 9 clients out of 10 are willing to recommend

ABN AMRO Clearing to their equals. This is a tremendous

recognition for the work of so many colleagues that strive

to deliver an excellent service to our clients, day in and

day out.

Almost every service category was rated at least ‘good’.

Of course we also received a number of critical and there-

fore valuable remarks about the standard of service in

certain specific areas.

Long-term partnerships

5What’s Next

Only one out of the 70 questions (i.e. tax reclaim services)

received an average score of between 4 and 4.5 (satisfac-

tory), which we read as an invitation to improve.

Below a selection of the enormous amounts of valuable

quotes from clients who completed the survey:

▶ Excellent team, we know them and they know us. We

feel excellent supported by them

▶ Solid understanding of client-base, ability to produce

bespoke risk management solutions, flexible by nature

▶ Your people are very switched-on. The IT team are very

easy to deal with, understand the products and make

intelligent decisions

▶ I have noticed very dramatic improvements in both your

risk team and your relationship teams and that makes

doing business with ABN very easy

▶ I believe Chicago is one of the better SBL desks in US

equities

We can only say that we are very proud to have such an

enthusiastic customer base. And once again would like to

thank everyone who took the time to complete the ques-

tionnaire. Your comments and input are not only highly

appreciated. These are absolutely vital if we are to take

our customer experience to a higher level as a dominant

global Prime Clearer and achieve our mission of making

our clients globally competitive!

Laura de Haan

Sales Support

laura.de.haan@nl.abnamro.com

6

About a year ago we launched Shark II, a system that is

designed to help customers satisfy the regulatory require-

ments.

Compliance driversRegulation (EU) 236/2012 of the European Parliament and

the Council on short selling and certain aspects of credit

default swaps (known as the ‘Short-Selling Regulation’ or

SSR for short) has come into force on 1 November of this

year. Basically, the SSR will affect the reporting of net

short positions and allow uncovered short transactions

subject to certain conditions.

If a short transaction does not meet the coverage require-

ments in the SSR, it may be effected only if it can be

plausibly demonstrated that it is likely that the shares that

are to be sold can actually be delivered. This so-called

‘locate rule’ requires an arrangement with a third party

who must confirm that the stock has been located and

therefore that the short position can be settled normally

on the transaction date. In other words, the regulation

requires a ‘reasonable expectation of availability’.

How does Shark II work?If an AAC customer is subject to the ‘locate rule’, he or

she will be invited to use Shark II. The customer will

log-on to the system and request information on the

availability of the securities in question. The system will

confirm that the required number of specific shares have

been located as required. If you submit a request to this

system, this confirmation can be used as proof for a

competent authority, i.e. a regulator. This confirmation will

provide you with a reasonable expectation that the settle-

ment can be effected when it is due. It is worth noting

that a ‘locate’ request will not lead to a SB&L transaction

or pre-borrow.

AAC will update the system on a daily basis with data on

available positions. Customers will submit ‘locate’ requests,

enquiring whether the securities they wish to sell short

have indeed reasonable expectation of availability.

Please contact your relationship manager if you

would like any further information about Shark II.

Shark II: Securities Availability System

Following recent developments in the European regulatory environment, AAC customers are now

required to check the availability of European securities before performing a naked short sell in a short

sell-restricted affected security.

7What’s Next

The European Markets Infrastructure Regulation (EMIR) is

part of the commitments made by the G20 to prevent

future financial crises following the collapse of Lehman

Brothers and the near-collapse of AIG. All G20 Members

have committed to drafting new rules in order to reduce

counterparty, operational and systemic risks related to

(OTC) derivative transactions. EMIR is the European

regulation that sets standards for the regulation of deriva-

tives, central counterparties (CCPs) and trade repositories

(TR) in the European Union (EU) and the European

Economic Area (EEA). It applies to all entities that enter

into derivative transactions (listed as well as OTC). The

rulemaking process is undertaken on a European level by

the European Securities & Markets Authority (ESMA).

Key features of EMIR and the implementation timelines

are the following:

▶ The reporting of all listed and OTC derivatives to a

registered trade repository

(start date February 12, 2014)

▶ Risk mitigating measures for non-centrally cleared

derivative products (already applicable)

▶ Mandatory clearing of all standardised OTC derivatives

(expected 2014 and onwards)

What has been implemented?The first range of EMIR obligations entered into force in

March 2013 and a second batch in September 2013. These

included a range of risk mitigating measures intended to

ensure that operational aspects of derivative transactions

between counterparties are now more aligned. This makes

the process much safer and mitigates a range of counter-

party and operational risks. The measures include obliga-

tions to confirm derivative transactions in a timely manner,

reconcile and compress portfolios on a periodic basis,

daily valuation of outstanding transactions, and agree

measures on dispute resolution.

What’s still in store?The mandatory clearing obligation is likely to commence

during the course of 2014/2015. It is expected that interest

rate and credit derivatives will be the first asset classes

that have an obligation to be cleared at a central counter-

party (CCP) authorised by ESMA. Mandatory clearing will

start after the CCPs are authorised, followed by a rule-

making process that specifies additional details on the

scope.

AACB are currently in the process to streamline our client

offering and IT infrastructure for the clearing obligation to

commence in 2014/2015. One of the key changes

compared to our current offering is that we will offer a

choice between an individual segregated account (ISA) or

an omnibus account (OSA) at the CCP. In an ISA account

client positions and collateral are placed in separate indi-

vidual accounts that are distinguished from other accounts

at the CCP. In an omnibus account (OSA) the positions of

multiple clients are combined, as is the case in our current

offering. ISA and OSA offer different levels of protection

and come at different costs. Additional communication

about this offering will follow in due course.

AACB’s approach to reportingThe reporting obligation is due to commence on 12

February 2014. AACB has selected Luxembourg-based

REGIS-TR as its trade repository. The entire European

derivative market is currently awaiting further regulatory

guidance from the European Securities and Markets

Authority (ESMA) on essential details of the reporting

obligation. At present, there is insufficient clarity on the

various reporting responsibilities in the trade flow. Until

then, AACB is unable to provide service offering details

and relevant pricing structure for the new delegated

reporting service that AACB is intending to offer.

EMIR. Where are we now?A quick recap: what is EMIR again?

8

More information about EMIREMIR is a set of standards for the regulation of deriva-

tives, central counterparties (CCPs) and trade repositories

(TR). EMIR is a European regulation that applies to any

entity established in the EU/EEA that transacts in deriva-

tives (listed as well as OTC). Various national as well as

European regulatory and governmental bodies have

published information about EMIR. They can be consulted

for additional information. ABN AMRO Clearing Bank N.V.

is unable to advise you on your EMIR obligations.

http://europa.eu

www.esma.europa.eu

www.afm.nl/emir

www.dnb.nl

9What’s Next

Rhyne, how did you get into tennis?‘I come from a big tennis family. Tennis has always played

such a big role in our lives that we even gave our pets

names like Wilson, Ace and Rafter (after the Australian

champion, Pat Rafter). My mom, Michelle, played college

tennis at the University of Tennessee and my father Bob

played at Duke. My younger sister Caitlin (19) is following

in my mother’s footsteps as she currently plays for the

University of Tennessee, whereas my older sister Jennifer

(28) played at Birmingham College. I am coached by my

cousin Christopher and my uncle Mike was a former ATP

world top 30 singles and top 10 doubles player!

I started playing tennis when I was 8 years old and my

mom was my coach until I was about 13. I also loved

playing basketball and baseball and when I was 13 I had to

decide which sport I wanted to pursue. That was a tough

decision because I was competitive in basketball and

baseball as well.’

What made you choose tennis over the other sports?‘In the end, I preferred to play an individual sport, as you

control your own destiny and I liked that. I went to train

with the United States Tennis Association (USTA) down at

Key Biscayne in Florida. I practiced there for about 15-20

weeks a year and usually flew down to Florida for 1-2 week

stretches at a time. I actually played two years of college

tennis at the University of Tennessee before I decided to

turn pro after my sophomore year when I was 20 years old.’

‘I come from a big tennis family’

Did you have a favourite player growing up?‘I’ve always been a fan of Roger Federer. I’ll never forget

the time I had a chance to practice with him. I was 17 years

old and I managed to get a wildcard for the qualifying

tournament for the Masters 1000 in Cincinnati. When I lost,

I decided to stick around, to practice with whoever needed

a hitting partner. And then I remember my coach received a

call, asking if I would be interested in hitting with Roger. Of

course, I definitely made time for that!

I still have to laugh about the whole experience. I was so

nervous that, when he hit the first ball towards me, I imme-

diately dumped my backhand in the bottom of the net. That

was a funny moment for both of us, but in the end we had

a great practice for about an hour and a half. We even

played a set, which I lost 6-3. So that wasn’t too bad.

The whole setting was crazy. There were between one

and two thousand people watching and security had to

help us get to the court. Roger still is very nice to me.

Every time I see him now, he says hello and he’s just a

really nice guy.’

Check Rhyne’s weekly blog here

Rhyne Williams: the next American tennis star?

At the end of the 2013 tennis season, the list of the world’s top 50 men players featured just two

Americans: John Isner (no. 14) and Sam Querrey (no. 46). After decades dominated by sporting

legends such as John McEnroe, Jimmy Connors, Andre Agassi and Pete Sampras, US tennis is

now waiting for new talent to emerge after Andy Roddick’s retirement. One of the young guns

hoping to fill the void is 22-year-old Rhyne Williams. Ranked just outside the top 100, he recently

signed a sponsorship deal with ABN AMRO Clearing.

10

‘I’ll never forget my practice session with Roger Federer’

You are currently ranked around 130th in the world. How do you look back on your season?‘I didn’t manage to reach my biggest goal of the season. It

was my ambition to break into the top 100 this year, but

unfortunately I have not yet been able to make that jump.

There were some great highlights, though. The best one was

reaching the semi-finals of my first ATP tournament in

Houston. Also, I won my first challenger tournament (one

level below ATP) in Dallas. Unfortunately, I have been plagued

by a shoulder injury these last few months, which caused me

to miss the tournament in Knoxville, my home town.’

What are your goals for 2014?‘I would like to play in all of the Grand Slam tournaments

– the Australian Open, Roland Garros, Wimbledon and the

US Open. Obviously my big goal of reaching the top 100

remains, which would also mean I can get direct entry in

the main draw for the four majors. Otherwise, I would

have to try and win three qualifying rounds each time to

earn my spot in the main event. That is what I’ll have to do

in Melbourne in January.’

‘I want to play in all the Grand Slam tournaments in 2014’

What are you looking forward to most in 2014?‘Playing at Wimbledon. My grandmother has always said

she wants to go to Wimbledon some day, so if I’m able to

qualify, she’ll come over to watch me play. Of course, I’m

also very much looking forward to taking part in the

ABN AMRO tournament in Rotterdam in February. I’ve

never been to Holland before and I always like going to

new places and meeting new people, so I’m looking

forward to that experience. I’ve only heard good things

about the tournament itself as well.’

What are the biggest challenges you have to overcome to keep improving yourself?‘Tennis is a crazy sport in which you never know what’s

going to happen next. You can lose 10 first rounds in a row

and then all of a sudden win a tournament. That’s all part of

the sport. What also makes it tough is that we hardly have

an off-season. We play from January to November, so we

put our bodies through a lot during the year. Fitness plays

such a predominant role in being a great tennis player these

days and I can still improve a lot in my flexibility. Doctors

have taken a look at my whole body recently and have said

that I really need to work on my flexibility in my hamstrings

and hips. They say it’s going to be an issue if I don’t work on

it soon, so that has been an eye-opener.’

‘Tennis is a crazy sport in which you never know what’s going to happen next’

How can ABN AMRO Clearing help your career? ‘It is great to have ABN AMRO Clearing on my side. They

do really help financially, so I can afford my rent (laughs),

things like that. I can play the Rotterdam tournament for

the next three years, which is something I probably never

would have done without them. It’s going to be fantastic.’

Thank you, Rhyne. We’d like to wish you all the best for next season.‘Thanks. And by the way, I write a weekly blog on the

ABN AMRO Clearing website about my life on tour, so you

can follow my experiences there!’

The stats on Rhyne Williams:

Date of birth: 22 March 1991 (22 years old)

Place of birth: Knoxville, Tennessee

Residence: Knoxville, Tennessee

Pro since: 2011

Career prize money: USD 321,973

Career high ranking: 114 (12 August 2013)

(ATP) singles titles: 0

(ATP) doubles titles: 0

Grand Slam singles results:

Australian Open: 1st round (2013)

Roland Garros: 1st round (2013)

Wimbledon: -

US Open: 1st round (2012, 2013)

Grand Slam doubles results:

Australian Open: -

Roland Garros: -

Wimbledon: -

US Open: 1st round (2011)

ABN AMRO Clearing named Prop traders’ clearing firm of the year by FOW Magazine

11What’s Next

ABN AMRO Clearing named ‘Proprietary Traders Clearing

Firm of the Year’ by the Futures & Options World (FOW)

Magazine, a subsidiary of the Euromoney Group.

We were selected by our clients during an online pool

which is voted for by proprietary traders who work in the

industry.

In its citation, FOW commented as follows; “This award is

voted for by clients so it represents a resounding stamp of

ABN AMRO Clearing’s customer service and client

offering from those that matter the most.”

“This award is a tribute from our clients to ABN AMRO Clearings capabilities in Global Clearing and will drive us on our way to become a global prime clearer. But above all this award is a recognition for the continuous hard work that all ABN AMRO Clearing staff delivers on a daily basis to make our clients globally competitive. We are proud to have such knowledgeable and hardworking staff and would like to thank them for their efforts!“

says Jan Bart de Boer CCO, ABN AMRO Clearing.

ABN AMRO Clearing named Prop traders’ clearing firm of the year by FOW Magazine

12

On the 12th of February, ABN AMRO Clearing organises the

3rd Amsterdam Investor Forum. During this event, we will

host the AIF Factor that gives the opportunity to managers

to present their funds strategy to an audience of 225+

attendees. There will be 6 slots for a pitch of 3 minutes with

no slides. The audience and a panel of seeders & investors

will vote for the most compelling and attractive pitch.

How can you enter The AIF Factor?Submit a quote of max. 150 words and convince us why

your Fund should be given the opportunity to make a

pitch. Each quote will be judged and the 6 best will be

allowed to pitch at the event. We are looking for quotes

which are compelling, persuasive, provocative and show

entre-preneurship. What makes your Fund stand out?

There are no minimum or maximum guidelines to fund

size, location, investment targets or style. The competition

is open to all active and prospective funds. The judges

decision and discretion is final.

The AIF Factor, raise your profile at the Amsterdam Investor Forum

ABN AMRO Clearing has a long history of incubating and supporting start-ups as well as partnering with

established investment managers. We strive to provide the necessary integrated solutions to accompany

our clients in their growth plan and make them globally competitive.

What does the Amsterdam Investor Forum 2014 have to offer? ▶ A possibility to present your Fund to an audience of over 200 attendees;

▶ A reserved table during lunch (including your marketing material);

▶ Marketing opportunities.

If you like this challenge and your Fund would like to become the winner of The AIF Factor, 2014

please complete the questionnaire and submit your quote to: http://www.aif.events.abnamro.nl/aif-factor

We kindly request you to submit your quote before the deadline of 15th of January 2014 and you will be informed

around the 20th January 2014 in case your fund is one of the 6 nominees to win the AIF Factor 2014.

We are looking forward to receive your quotes!

The AIF Factorraise your profile at the Amsterdam Investor Forum 2014!

Wednesday12 February 201409:00 – 17:30 hrs

How can you enter The AIF Factor? Submit a quote of max. 150 words and convince us why your Fund should be given the opportunity to make a pitch.

Each quote will be judged and the 6 best will be allowed to pitch at the event. We are looking for quotes which are

compelling, persuasive, provocative ans show entrepeneurship. What makes your Fund stand out?

Quotes which exceed the max. of 150 words will be automatically excluded. There are no minimum or maximum

guidelines to fund size, location, investment targets or style. The competition is open to all active and prospective

funds. The judges decision and discretion is final.

What does the Amsterdam Investor Forum 2014 have to offer? A possibility to present your Fund to an audience of over 200 attendees;

A reserved table during lunch (including your marketing material);

Marketing opportunities.

If you like this challenge and your Fund would like to become the 2nd winner of The AIF Factor,

please complete the questionnaire and submit your quote to: aif.events.abnamro.nl/form

We kindly request to submit your quote before the deadline of 15th of January 2014 and you will be informed by

the 20th January 2014 if you have been invited to pitch.

We are looking forward to receive your quotes!

ABN AMRO Clearing

ABN AMRO Clearing has a long history in partnering with start-ups as well as established (alternative)

investment vehicles and in providing them with the needed integrated solutions for their execution,

clearing, custody and financing needs.

On 12th February 2014 we will organise the Amsterdam Investor Forum again. During this event we will

host The AIF Factor. The AIF Factor gives you the opportunity to pitch your Fund to an audience of more

than 200 attendees. There are 6 time slots available, you will be given max. 3 min. (without slides) to

pitch your Fund and the audience, as well as a panel of well known seeders, will vote on your pitch.

Find here the agenda for the AIF

13What’s Next

Quarterley update November 2013 News from the Dutch and European

securities industries

European Central Bank

▶ TARGET2 Securities (T2S)

Update on status of T2S project

Info sessions

T2S Info sessions organised by the ECB are designed to

inform external stakeholders about the progress of the

TARGET2 securities project and to elicit comments on the

current proposals.

Upcoming info session Lisbon, 13 December

Central securities depositories which have signed up

for T2S

CSDs provide information such as the latest developments

regarding T2S, an overview of how they are planning to use

and integrate the T2S platform, and specific plans for

adjusting to T2S. The following website provides a single point

of access to all T2S-related information provided by each CSD:

http://www.ecb.europa.eu/paym/t2s/stakeholders/csd/

html/index.en.html

Plans for becoming a directly connected party

ABN AMRO Clearing is planning to become a directly

connected party (DCP) in T2S. You can find a full list of

prospective DCPs here:

http://www.ecb.europa.eu/paym/t2s/pdf/institutions_that_

intend_to_become_DCP_in_T2S.pdf

Upcoming T2S Advisory Group meetings:12-13 February 2014

17-18 June 2014

26-27 November 2014

T2S website:

http://www.ecb.int/paym/t2s/html/index.en.html

Regulated exchanges

NYSE Euronext (NYX)On 13 November, Intercontinental Exchange announced

the successful completion of its acquisition of NYSE

Euronext. ICE and NYSE Euronext will continue to operate

under their respective brand names. As previously

announced, Intercontinental Exchange expects to float the

Euronext group of continental European exchanges as a

stand-alone entity, subject to market conditions and regu-

latory approvals.

Derivatives clearing

NYSE Liffe contracts traded on the Amsterdam, Brussels,

Lisbon and Paris derivatives markets are cleared by LCH.

Clearnet SA. LCH.Clearnet SA and NYSE Euronext

announced on 17 October that they had signed a new

five-year contract for LCH.Clearnet SA to clear NYSE

Euronext’s continental listed derivatives until December

2018. The new contract replaces the current clearing

services terms and contract, both of which were due to

expire on 31 March 2014.

Contracts traded on the London market and those

reported to NYSE Liffe via BClear have been cleared by

ICE Clear Europe Limited since 2 July of this year.

ABN AMRO Clearing is a general clearing member of

LCH.Clearnet SA and ICE Clear Europe Ltd.

Website: www.euronext.com

14

Deutsche Börse (DB)Deutsche Börse AG announced the purchase of a minority

stake in Global Markets Exchange Group International LLP

(‘GMEX Group’) on 24 October. GMEX Group is a London-

based exchange business focusing on the launch of a suite of

new products, including original interest-rate swap futures

contracts, derivatives indices and emerging markets exchange

business partnerships enabled by multi-asset trading tech-

nology. This step will enable Deutsche Börse to support new

product concepts, some of which will help institutions to

reduce costs to both balance sheet and margining.

Website: http://deutsche-boerse.com/dbag/dispatch/en/kir/

gdb_navigation/home

Bats Chi-X EuropeBATS Chi-X Europe announced on 31 October that it is in

the process of onboarding customers to BXTR, a suite of

on- and off-exchange trade reporting services. With all

functions fully operational, BXTR offers the pan-European

trading community a comprehensive solution for reporting

trades, with the option of centrally clearing and multilater-

ally settling their off-order book trades.

Website: http://www.batstrading.co.uk/

London Stock Exchange Group (LSEG)On 13 November, the Group announced the success of its

strategy to grow and diversify revenues. In particular, the

acquisition of a majority stake in LCH.Clearnet will give

LSEG a systemically important financial infrastructure asset

with significant international scale. The acquisition means

that LSEG will be able to further transform its business over

the coming years by developing growth opportunities in

OTC and other markets and by implementing operational

efficiencies and service improvements.

Website: http://www.londonstockexchangegroup.com/

NASDAQ OMX Nordics (NON)

Website: http://nordic.nasdaqomxtrader.com/

MiFID databaseThis database contains information on shares admitted to

trading on EU-regulated markets, systematic internalisers,

multilateral trading facilities, regulated markets and central

counterparties, as required under the MiFID directive

Website: http://mifiddatabase.esma.europa.eu/Index.

aspx?sectionlinks_id=4&language=0&pageName=Home

Central counterparties (CCPs)

LCHClearnet Group LCH.Clearnet SA and NYSE Euronext announced on 17

October that they had signed a new five-year contract for

LCH.Clearnet SA to clear NYSE Euronext’s continental

listed derivatives until December 2018.

LCH.Clearnet Ltd’s ForexClear expanded its FX derivatives

clearing service on 7 November, with the launch of a new

offering for buy-side clients. ForexClear is now available to

buy-side clients through one of three futures commission

merchants, i.e. Deutsche Bank, J.P. Morgan and Morgan

Stanley. The new service will initially offer FX non-deliver-

able forwards (NDFs) out to two years.

Website: http://www.lchclearnet.com/default.asp?noflash=-

false

Eurex Clearing AGEurex Clearing received confirmation on 11 October from

its competent national authority, BaFin (Federal Financial

Supervisory Authority), that its application under EU

Regulation 648/2012 on OTC derivatives, central counter-

parties and trade repositories (EMIR) was complete.

This means that the following timeline applies, as set out

in EMIR:

▶ Within four months from 11 October 2013, the compe-

tent national authority (BaFin) will conduct a risk

assessment of Eurex Clearing and submit a report to

the College of Supervisors.

▶ After receiving the risk assessment report, the College

will have 30 calendar days in which to reach a joint

opinion on whether Eurex Clearing is in compliance

with the EMIR requirements.

▶ Overall, EMIR estimates that the national competent

authority will not require more than six months (from

the date on which the completeness of the application

is confirmed) to inform the applicant CCP in writing as

to whether authorisation has been granted or refused.

As from the date on which Eurex Clearing was authorised

as a CCP under EMIR, certain requirements set out in

EMIR and relevant Commission-delegated Regulations

immediately apply on a mandatory basis to its members.

These include the terms of article 39 (‘Segregation and

Portability’).

Website: http://www.eurexclearing.com/clearing-en/

15What’s Next

EMCF AND EUROCCP COMPLETE TRANSAC-TION TO FORM LARGEST PAN-EUROPEAN EQUITIES CLEARING HOUSEDutch regulators approve additional shareholders, DTCC

and BATS Chi-X Europe.

EMCF and EuroCCP, two leading pan-European cash

equities clearing houses, in March 2013 announced their

intention to combine their strengths and capabilities to

form a new clearing house designed to deliver greater

efficiencies and sustainable competition to the pan-Euro-

pean market place.

On 9 December they have announced that the transaction

to combine the two entities is now complete.The

combined clearing houses will form Europe’s largest cash

equities central counterparty, further enhancing competi-

tion while improving the efficiency of European equities

clearing.

The completion of the transaction follows the approval

given by the Dutch Central Bank, De Nederlandsche Bank

N.V., to The Depository Trust & Clearing Corporation and

BATS Chi-X Europe to become shareholders in Amster-

dam-based EMCF. They join current owners of EMCF –

ABN AMRO Clearing Bank and NASDAQ OMX – as equal

owners of the new entity. The name change of EMCF to

European Central Counterparty N.V. will take effect from 6

January 2014.

Website: http://www.euroccp.co.uk/

Central securities depositories (CSDs)

(European) CSDs

Euroclear

As from 6 October 2014, securities transactions conducted

on all trading venues (i.e. stock exchanges, multi-lateral

trading facilities and organised trading facilities) that settle

in Euroclear Belgium, Euroclear France and Euroclear

Nederland will be settled on a T+2 basis. OTC transactions

are exempt from the T+2 regime. This move pre-empts the

proposed 2015 start date stipulated in the pending CSD

Regulation for T+2 settlement across the European Union.

An ESES working group will be formed to prepare testing

and migration for T+2 settlement.

It will be led by Euroclear and will contain representatives

of other infrastructures (i.e. NYSE Euronext, LCH.CN and

others) and of the three ESES (Euroclear Settlement for

Euronext-zone Securities) markets. The mandate is to

discuss and clarify any topic or issue related to testing and

migration to T+2.

UK and Nordic markets have confirmed their willing to

migrate on the same date as ESES & Portuguese markets.

Websites: www.euroclear.com

www.ecsda.eu

ClearstreamStrate, Africa’s leading CSD, and Clearstream announced

the launch of a centralised collateral management service

for the South African financial market on 31 October.

Some of South Africa’s biggest financial institutions,

including banks, fund managers and the Johannesburg

Stock Exchange (JSE), have agreed to explore the use of

these services for managing collateral more efficiently and

for mitigating operational and credit risk in the South

African market.

A few weeks before, on 8 October, Clearstream and the

Dubai Commodities Clearing Corporation (DCCC), the

central counterparty of the Dubai Gold & Commodities

Exchange (DGCX), announced an agreement to cooperate

on collateral management for CCP margining. By the end

of the first quarter of 2014, DGCX customers will be able

to leverage the collateral pools of Clearstream and its

global strategic partners to meet the DCCC’s margin

requirements.

Website: http://www.clearstream.com/ci/dispatch/en/kir/

ci_nav/home

European Commission

Internal Market/directorate G: financial services policy and financial markets

▶Unit G2 Financial Markets Infrastructure

Website: http://ec.europa.eu/internal_market/financial-

markets/index.htm

16

European Market Infrastructures Regulation (EMIR)

Trade repositoriesOn 7 November, the European Securities and Markets

Authority (ESMA) announced the registration and approval

of the first four trade repositories (TRs) under the

European Market Infrastructure Regulation (EMIR). The

following entities have been registered as TRs for the

European Union:

▶ DTCC Derivatives Repository Ltd., based in the UK;

▶ Krajowy Depozyt Papierów Wartosciowych S.A., based

in Poland;

▶ Regis-TR S.A., based in Luxembourg;

▶ UnaVista Ltd, based in the United Kingdom.

The data gathered by TRs will enable regulators to identify

and reduce the risks associated with derivative markets.

The registration of these TRs means that they can be used

by the counterparties to a derivative transaction to fulfil

their trade reporting obligations under EMIR. The registra-

tions took effect on 14 November, with the reporting

obligation beginning on 12 February 2014, i.e. 90 calendar

days after the official registration date.

The registered TRs cover all derivative asset classes, i.e.

commodities, credit, foreign exchange, equity, interest

rates and others, irrespective of whether the contracts are

traded on or off exchange.

Indicative timeline for further milestonesAuthorisation of CCPs by national competent authority:

15 March 2014

Notification of clearing obligation

(immediately after authorisation of CCPs): 16 March 2014

ESMA submits draft regulatory technical standards

on clearing obligation: 15 September 2014

EC website: http://ec.europa.eu/internal_market/financial-

markets/derivatives/index_en.htm#consultations

EC website with FAQs: http://ec.europa.eu/internal_

market/financial-markets/docs/derivatives/doc_121114_

emirfaqs_en.pdf

Website: http://ec.europa.eu/internal_market/financial-

markets/securities-law/index_en.htm

Central securities depositories (CSDs) and certain aspects of securities settlement (CSD Regulation)

StatusThe Level 1 texts of the CSD Regulation are likely to be

agreed before the European Parliament elections

scheduled for May 2014. This means that next year will be

about drafting and agreeing the Level 2 texts.

Website: http://ec.europa.eu/internal_market/

consultations/2011/csd_en.htm

▶Unit G3 Securities Markets

Website: http://ec.europa.eu/internal_market/securities/

index_en.htm

Reviews of the Markets in Financial Instruments Directive/Regulation (MiFID/MiFIR) and Market Abuse Directive (MAD)

The Level 1 texts of MiFID II and MAD II are likely to be

agreed before the European Parliament elections

scheduled for May 2014. This means that next year will be

about drafting and agreeing the Level 2 texts.

The ESMA has published and circulated a discussion

paper on the implementation of the Market Abuse

Regulation. Market participants have until 27 January 2014

to respond, after which ESMA will prepare consultation

papers on both its draft technical standards and its

technical advice to the Commission. The latter must be

delivered within eight months of the date of entry into

force of the MAR text, while the timeline for the technical

standards remains open.

Website: http://ec.europa.eu/internal_market/securities/

abuse/index_en.htm

Website: http://ec.europa.eu/internal_market/securities/

isd/mifid_en.htm

17What’s Next

European Securities and Markets Authority

The object of the ESMA is to enhance the protection of

investors and promote stable and well-functioning finan-

cial markets in the European Union. As an independent

institution, the ESMA seeks to fulfil this aim by building a

single rulebook for EU financial markets and ensuring its

consistent application across the EU. The ESMA contrib-

utes to the regulation of financial services firms with a

pan-European reach, either by means of direct supervision

or by the active coordination of national supervisory

activity.

The ESMA has published its programme of activities for

2014.

Website: http://www.esma.europa.eu/system/files/2013-

1355_esma_2014_work_programme.pdfegislation

18

Below an overview of events in each region in where ABN AMRO Clearing will participate or have

representatives attending.

Europe 22 - 23 january18th Clearstream’s Global Securities Financing Summit

Location: Luxembourg

AAC Representatives: Alexander Jacobs participates in

panel about OTC derivatives and upcoming challenges

at 9.30 hrs CET

11 - 13 febE-World - Energy & Water 2014

Location: Essen

AAC Representatives: Emile Goulmy, Miquel Thijssen

18 March 2014The future of clearing and Settlement

Location: London

AAC Representatives: Jan Bart de Boer will speak about

Connected and Secure Clearing services

31 March – 2 AprilFT Commodities global summit

Location: Lausanne

AAC Representatives: Vicky Sins

8 - 9 AprilTradeTech

Location: Paris

America16 JanuaryHedge Fund Networking

Location: San Fransisco

27 – 29 JanuaryManaged Funds Association

Location: Miami

event calender

What’s Next? Is a quartely publication of Commercial & Merchant Banking.

Editors

Jan Bart de Boer

Lammert Bos

Laura de Haan

Geert Vanderbeke

Henk van Vliet

James Egan

Follow us on

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