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NASDAQ OMX Clearing Introduces Two New Fee and Rebate Models

NASDAQ OMX Clearing introduces two new fee and rebate models for client clearing of SEK Fixed Income products 

April 30, 2014

 

NASDAQ OMX Clearing introduces two new client clearing fee and rebate models: “High Turnover - Single client clearing account” and “High Turnover - Multiple client clearing accounts”. The new models will supplement the existing client fee and rebate model and be available from January 1, 2015. In anticipation of the new client clearing fee and rebate models, NASDAQ OMX Clearing also adjusts its clearing fees for certain products, see Interim Rebate below. In addition, NASDAQ OMX Clearing introduces a new client safekeeping fee discount available on certain conditions, see New client safekeeping fee discount for securities collateral below.

The new rebate models will be available for client clearing on Individual Segregated Client Accounts (ICA), Direct Pledge (DP) Accounts and Omnibus Accounts [1].

[1] Require the use of sub accounts.

 

In order to benefit from the new fee and rebate model each client must actively elect one of the available fee and rebate models by filling out the “NASDAQ OMX Fixed Income Client Fee and Rebate Model Application” form and return such form to its Clearing Broker for onwards delivery to NASDAQ OMX Clearing. The application form will be available on NASDAQ OMX’s website or from the clients’ respective Clearing Broker from October 2014. If an active choice is not made prior to January clients will remain on the existing fee and rebate model.

Please note that all clearing fees and rebates presented herein may be subject to change.

 

In the interim period (from 30th of April until January 1, 2015) NASDAQ OMX Clearing offers adjusted client clearing rebates as follows

  • 100% discount on the regular registration fee for back-loaded legacy Interest Rate Swaps (IRS) (only available until September 1, 2014)
  • 60% discount on the regular settlement fee for IRSs
  • 50% discount on the regular clearing fees for Swedish krona (SEK) denominated Repos

 

New client safekeeping fee discount for securities collateral

NASDAQ OMX offers a 70% safekeeping fee discount on collateral pledged in the form of eligible securities. The reduced safekeeping fee to 3 basis points (from current 10 basis points) will apply to all securities posted as collateral against the relevant client clearing account. The discount will be applied until further notice from the time at which the first Interest Rate Swap has been cleared on the relevant account.

 

New client fee and rebate models – High Turnover

NASDAQ OMX introduces two new rebate models supplementing the existing rebate model for client clearing of fixed income instruments.

The new fee and rebate models cover all of NASDAQ OMX Clearing’s SEK denominated fixed income derivatives. To qualify for a certain rebate clients must reach pre-defined clearing fee levels, which will vary depending on clients’ choice of rebate model, as set out in the tables below.

The fee and rebate models will be offered on a client-by-client basis. However, clients belonging to the same group of companies may be regarded as one client for the purposes of the rebate models. This means that the clearing fees of the group’s client clearing accounts will be aggregated for the purposes of determining the fee level according to the “High Turnover – Multiple client clearing accounts” schemes described below. A client using a single client clearing account will instead apply the “High Turnover – Single client clearing account” scheme described below.

The new rebate models will initially be offered for one year from January 1, 2015. Thereafter NASDAQ OMX Clearing will evaluate the market response to the rebate models. NASDAQ OMX Clearing is committed to always offer clearing of fixed income products on competitive terms.

 

Existing rebate model

In this model a client is allowed to accumulate clearing fees across certain of NASDAQ OMX’s available SEK denominated fixed income derivatives generated on a single eligible client clearing account.

Fee Level Rebate Criteria Rebate
Base Accumulated clearing fees < 600K See respective instrument*

Rebate level 1

Accumulated clearing fees > 600K 25% off base fee

Rebate level 2

Accumulated clearing fees > 1.2M

60% off base fee

*Available in NASDAQ OMX Clearing Rules

 

High Turnover - Single client clearing account (NEW)

In this model a client is allowed to accumulate clearing fees across all of NASDAQ OMX’s available SEK denominated fixed income derivatives generated on a single eligible client clearing account.

Fee Level Rebate Criteria Rebate
Base Accumulated clearing fees < 1.2M See respective instrument*

Rebate level 1

Accumulated clearing fees > 1.2M 25% off base fee

Rebate level 2

Accumulated clearing fees > 2.4M

60% off base fee

*Available in NASDAQ OMX Clearing Rules

 

High Turnover - Multiple client clearing accounts (NEW)

In this model a client is allowed to accumulate clearing fees across all of NASDAQ OMX’s available SEK denominated fixed income derivatives generated over multiple eligible client clearing accounts

Fee Level Rebate Criteria Rebate
Base Accumulated clearing fees < 3.0M See respective instrument*

Rebate level 1

Accumulated clearing fees > 3.0M 25% off base fee

Rebate level 2

Accumulated clearing fees > 6.0M

60% off base fee

*Available in NASDAQ OMX Clearing Rules

 

Please note that all clearing fees and rebates presented herein may be subject to change.

 

List of rebate eligible instrument (SEK) existing and new model

The list below indicates which instruments are eligible for clearing in respective rebate model, the existing and new rebate model.

 

Clearing Instrument Existing rebate model New rebate models
Swedish Government Bond Forward Yes Yes
SEK Mortgage Bond Forward Yes Yes
STIBOR-FRA Yes Yes
RIBA Flat fee* Yes
SEK-IRS Separate rebate model* Yes
SEK-OIS Separate rebate model* Yes
SEK-OTC-FRA Separate rebate model* Yes
STIBOR-FRA Options Yes Yes
Swedish Government Bond Forwards Options Flat fee* Yes
SEK denominated Repos Flat fee* Yes

* As described in NASDAQ OMX Clearing Rules

 

Interim rebate

Until the new rebate model for clients is available, NASDAQ OMX will offer interim rebates on the regular clearing fees for Interest Rate Swaps, back-loading of Interest Rate Swaps, discount on safekeeping fee for securities collateral and a discount on regular clearing fees for SEK denominated Repo transactions.

Rebate on Settlement fee for SEK Interst Rate Swaps

NASDAQ OMX offers 60% discount on the settlement fee for all cleared SEK Interest Rate Swaps, the fee and rebate model for 2014 will be as follows in table below.

Fee Type  Base fees Interim rebate
Registration fee 4.00 SEK per million  Current rebate scheme**
Settlement fee 2.00 SEK per million 60% (i.e. 0.8 SEK per million)*

* This rebate will be effective from first cleared IRS and remain throughout 2014, i.e. not necessary to meet any rebate criteria.

** Current rebate scheme refers to currently active rebate scheme

 

Rebate on back-loading of Interest Rate Swaps

NASDAQ OMX offers a 100% discount on registration fee for all legacy swaps back-loaded for clearing before 1 September 2014. The applied settlement fee for back-loaded swaps will be according to above Interim Rebate scheme, i.e. SEK 0.8 for the remainder of 2014.

 

Discount on clearing fees for SEK denominated repos

For the rest of 2014 NASDAQ OMX offers a 50% discount on clearing fees for SEK-denominated repos.

 

 

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