Eurex Clearing strips Maple Bank of its membership
09 February 2016 Frankfurt
Image: Shutterstock
Maple Bank has been forced to cease all transactions through Eurex Clearing鈥檚 services, including its securities lending central counterparty, due to the ban on its German branch.
BaFin, Germany鈥檚 financial regulator, issued a ban of sales and payments, known as a moratorium, on 6 February due to the threat of balance sheet over-indebtedness.
The German branch of Canada-based Maple Financial Group is currently closed for business to all customers except to accept payments meant to go toward paying off its outstanding debts.
A spokesperson for Eurex Clearing said: 鈥淭he executive board of Eurex Clearing terminated the clearing membership of Maple Bank.鈥�
鈥淭he ordering of the moratorium by BaFin caused a material admission prerequisite for a clearing membership with Eurex Clearing to be no longer satisfied such that a termination event pursuant to Chapter 1 Part 1 Number 7.2.1 (7) of the Clearing Conditions occurred.鈥�
鈥淎ll open proprietary positions of Maple Bank will be liquidated in due course within the defined default management process.鈥�
The deposits of Maple Bank鈥檚 customers are protected under the German Deposit Guarantee Act.
The bank belongs to the Compensation Scheme of German Banks. The statutory conditions for compensation of up to 鈧�100,000 per depositor are met when BaFin has determined that compensation is payable.
BaFin stressed in a statement: 鈥淢aple Bank is not systemically important and thus poses no threat to financial stability鈥�.
As at 4 February 2016, the balance sheet total of Maple Bank stood at roughly 鈧�5 billion with liabilities towards institutional customers of close to 鈧�2.6 billion鈥攍iabilities to retail customers only make up a negligible share of the liabilities.
Following the German branch closure, the National Bank of Canada, which owns almost 25 percent of Maple Bank鈥檚 parent company, agreed to take an investment writedown of $165 million in Maple Financial Group, representing 100 percent of its investment carrying value.
Maple Bank鈥檚 troubles first started to show in September 2015 when its offices were raided by German prosecutors in a probe over serious tax evasion and money laundering following accusations of dividend stripping.
The bank was cited as the largest target in a crackdown on financial misconduct, with unpaid taxes by the bank valued at roughly 鈧�450 million.
National Bank of Canada said in a statement: 鈥淣one of National Bank of Canada and its employees were involved in these [allegedly illegal] trading activities, nor to our knowledge is National Bank of Canada or any of our employees the subject of these investigations.鈥�
鈥淣ational Bank has advised the German authorities that if it is determined portions of dividends received from Maple Financial Group could be reasonably attributable to tax fraud by Maple Bank, arrangements will be made to repay those amounts to the relevant authority. If any repayments are required they are not expected to be material to National Bank.鈥�
BaFin, Germany鈥檚 financial regulator, issued a ban of sales and payments, known as a moratorium, on 6 February due to the threat of balance sheet over-indebtedness.
The German branch of Canada-based Maple Financial Group is currently closed for business to all customers except to accept payments meant to go toward paying off its outstanding debts.
A spokesperson for Eurex Clearing said: 鈥淭he executive board of Eurex Clearing terminated the clearing membership of Maple Bank.鈥�
鈥淭he ordering of the moratorium by BaFin caused a material admission prerequisite for a clearing membership with Eurex Clearing to be no longer satisfied such that a termination event pursuant to Chapter 1 Part 1 Number 7.2.1 (7) of the Clearing Conditions occurred.鈥�
鈥淎ll open proprietary positions of Maple Bank will be liquidated in due course within the defined default management process.鈥�
The deposits of Maple Bank鈥檚 customers are protected under the German Deposit Guarantee Act.
The bank belongs to the Compensation Scheme of German Banks. The statutory conditions for compensation of up to 鈧�100,000 per depositor are met when BaFin has determined that compensation is payable.
BaFin stressed in a statement: 鈥淢aple Bank is not systemically important and thus poses no threat to financial stability鈥�.
As at 4 February 2016, the balance sheet total of Maple Bank stood at roughly 鈧�5 billion with liabilities towards institutional customers of close to 鈧�2.6 billion鈥攍iabilities to retail customers only make up a negligible share of the liabilities.
Following the German branch closure, the National Bank of Canada, which owns almost 25 percent of Maple Bank鈥檚 parent company, agreed to take an investment writedown of $165 million in Maple Financial Group, representing 100 percent of its investment carrying value.
Maple Bank鈥檚 troubles first started to show in September 2015 when its offices were raided by German prosecutors in a probe over serious tax evasion and money laundering following accusations of dividend stripping.
The bank was cited as the largest target in a crackdown on financial misconduct, with unpaid taxes by the bank valued at roughly 鈧�450 million.
National Bank of Canada said in a statement: 鈥淣one of National Bank of Canada and its employees were involved in these [allegedly illegal] trading activities, nor to our knowledge is National Bank of Canada or any of our employees the subject of these investigations.鈥�
鈥淣ational Bank has advised the German authorities that if it is determined portions of dividends received from Maple Financial Group could be reasonably attributable to tax fraud by Maple Bank, arrangements will be made to repay those amounts to the relevant authority. If any repayments are required they are not expected to be material to National Bank.鈥�
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