CCP.A acts as the clearing agent for the Vienna Stock Exchange (VSE) and is the central counterparty for all trades concluded on the exchange. In this key role, CCP.A makes a major contribution to the stability of the financial market.
For the clearing and settlement of stock exchange transactions in the cash market, CCP.A uses the automated SICS system (Settlement Information and Clearing System) developed and operated by OeKB. It uses the CSD.Austria accounts of the Vienna
Stock Exchange members to enter the net securities balances. Exchange transactions in the derivatives market are cleared via the EUREX system operated by the Vienna Stock Exchange. More than 9,200 different products are currently processed through these systems.
The following table shows the transaction volume contracted and cleared in 2012 by CCP.A as the central counterparty.
membership in the Frankfurt Stock Exchange and all seven German regional exchanges without having to build and maintain their own clearing and settlement infrastructure. The securities bought in Germany are credited to the accounts within CSD.Austria (providing a single point of entry), where they are administered. OeKB was the only central securities depository in Europe to offer such a service. As of the end of 2012, five Austrian banks settled their securities trades on the German exchanges via OeKB’s CCL product.
On these other exchanges, OeKB complements its settlement service by also acting as an execution broker with electronic order routing. To do so, OeKB became a member of all trading floor exchanges in Germany. The orders are sent electronically to OeKB and automatically routed to the appropriate stock exchange for execution. Through efficient risk management and its own dunning system, OeKB optimises the clearing and settlement of securities trades in Germany and the fulfilment of its customers’ payment and delivery obligations.
In the year under review, OeKB upgraded its technolo- gical infrastructure and now uses a certified provider of order routing systems. This change did not entail any monetary or other costs for customers.
European developments
In 2012 the European Commission drew up a pro- posed Regulation for the improvement of securities settlement in the European Union and on central securities depositories. It is expected that the Regula- tion will take effect in 2013 and will have to be imple- mented after a likely transition period of two years. The Regulation will also affect the business activities of CSD.A.
At the end of June 2012, OeKB signed the framework agreement on the use of the securities settlement platform, Target 2 Securities (T2S), to be developed by the Eurosystem. The migration of CSD.A’s IT systems to the new platform is planned for November 2016.
1 Netting factor: Number of trades divided by number of net positions.
2012 2011
Number of orders executed 5,936,050 6,319,041 4,511,593
Turnover in EUR million (double counted) 76,556 62,572 36,947
Total number 305,343 282,337 242,729
Netting factor1 31.7 35.1 29.2
Number of contracts 838,911 874,063 710,422
Volume of contracts in EUR million 16,993.33 15,734.81 15,632.17
Volume of exchange-traded options in EUR million 131.31 119.25 74.38
2010
Derivatives market
Exchange turnover Stock exchange turnover
Cash market
Cleared net positions
As of the end of 2012, CCP.A served 68 Austrian and international members, all of them also members of the Vienna Stock Exchange.
To ensure the fulfilment of transactions under con- stantly changing market conditions, CCP.A employs a multi-tiered collateral system, which was approved also by the FMA. The risks are recalculated several times per day and every clearing parti cipant deposits security in a common fund (the clearing fund) accor- ding to its particular level of risk or the risk of its Non Clearing Members (NCM).
At the end of 2012 the CCP.A held collateral and other security totalling about EUR 540 million in the form of a common fund for the cash and derivatives market and in the form of individual security of clea- ring members.
In August 2012 the European Market Infrastructure Regulation (EMIR) took effect. In connection with this, the European Securities Market Authority (ESMA) and the European Banking Authority (EBA) at the end of September 2012 submitted the regulatory technical standards (RTS) to the European Commission, which approved them at the end of 2012. After passage by the EU Parliament and the Council, the standards are expected to enter into force in the first quarter of 2013. They represent the requirements which central counterparties recognised in the EU will have to meet in future. Next to changes in processes, the standards will centre on changes in risk management and on capital requirements for CCPs.
The liberalised energy market too is a beneficiary of the expertise accumulated by OeKB over decades. As part of the deregulation of the Austrian energy mar- kets which during 2012 culminated in the implemen- tation of the Third Energy Package in the electricity and gas market, OeKB performs the financial clearing, risk management and credit analysis on behalf of the independent clearing agencies created for the deter- mination, clearing and settlement of “balancing energy” (APCS Power Clearing and Settlement AG and AGCS Gas Clearing and Settlement AG) and on behalf of Energy Exchange Austria (EXAA) and OeMAG, the clearing and settlement agent for green electricity. In addition, the OeKB Group provides a resource-saving outsourcing solution to Austrian companies for the trading of carbon emission allowances (EUAs and CERs, also referred to in Austria as CO2emission certificates).
Services to the balancing energy market for power and gas
In the liberalised Austrian energy market, APCS Power Clearing and Settlement AG (APCS) was licenced in 2001 as the balancing energy clearing agent for electricity, and AGCS Gas Clearing and Settlement AG (AGCS) was licenced in 2002 as the corresponding agent for gas.
As clearing agencies, the main responsibility of APCS and AGCS is to provide a competitive balancing energy market for electricity and gas.
More on APCS and AGCS and their services: www.apcs.atand www.agcs.at
Services for Energy Exchange Austria
In 2002, Energy Exchange Austria (EXAA) used the full liberalisation of the Austrian electricity market to open for trading in the electricity spot market. In addition to the usual responsibilities of an exchange, EXAA acts as the central counterparty for all trades.
More on EXAA and its services: www.exaa.at
Services to the clearing and settlement agent for green electricity
OeMAG Abwicklungsstelle für Ökostrom AG was set up in July 2006 under the amendment of Austria’s Green Electricity Act, which introduced a uniform Austria-wide approach to the subsidisation of electri- city from environmentally friendly sources. OeMAG handles the clearing and settlement of the green electricity subsidies and is the appointed sole clearing and settlement agency for subsidised green power in Austria.
More on OeMAG and its services: www.oem-ag.at
Services as a clearing bank to European Commodity Clearing AG (ECC)
Since 2012 OeKB provides services as a clearing bank to the spot energy market.
The clearing bank function consists of providing ac- counts, payment processing and collateral manage- ment for exchange members.
Carbon emission trading services
The OeKB Group provides an easy solution for the cost-efficient and convenient buying and selling of spot carbon dioxide allowances over-the-counter.
Under the European Union Emission Trading Scheme (EU ETS), which governs carbon trading in the EU, OeKB supports purchases and sales of allowances.