May 31, 2012
Eurex Clearing and Major Dealers to Cooperate in Launch of OTC Interest Rate Swaps Clearing
EurexOTC Clear for Interest Rate Swaps will deliver efficient risk management and safety for dealer and client clearing / Strong Client Asset Protection services in line with new EMIR requirements / High capital efficiency through portfolio risk management and efficient collateral processes
Eurex Clearing, Europe’s leading clearinghouse, announced today that it is cooperating with Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, J.P. Morgan and Morgan Stanley to support the launch of its new clearing service for OTC Interest Rate Swaps (IRS). EurexOTC Clear for IRS will deliver efficient risk management and safety for dealer and client clearing ahead of the start of the clearing obligations in Europe as required by the European Market Infrastructure Regulation (EMIR). Eurex Clearing plans to achieve technical production readiness beginning of July 2012; the production roll-out planned for the second half of 2012 will then be closely coordinated with the readiness of clearing firms ahead of the new regulatory requirements.
"A strong value proposition is key to success in this market. Eurex Clearing has always been at the forefront of innovation in CCP risk management. It is our objective to offer choice to our customers to select the CCP offering that addresses their needs in the most efficient and effective way. We believe Eurex OTC Clear for IRS will deliver a strong value proposition," said Jon Hitchon, Global head of Markets Clearing at Deutsche Bank.
"We are pleased to be working with Eurex Clearing on this CCP offering to be able to provide our customers an efficient and effective way to meet the imminent clearing regulations," said Piers Murray, Global head of OTC Interest Rate Clearing at J.P. Morgan.
"Our industry is facing far-reaching structural changes to meet the clearing mandates for OTC derivatives. We need partners to meet these challenges. Eurex Clearing is a strong player in derivatives markets and is well known for its ability to deliver," said Christian Mundigo, Global head of Rates Trading & Co-Head of FI Americas at BNP Paribas.
"We are excited to work closely with the leading OTC derivative dealers in rolling out our new service. Our objective is to deliver the market leading solution for OTC client clearing in Europe. Our customers will benefit from a broad product coverage across asset classes, full portfolio based risk management across listed and OTC products, strong asset protection and a broad collateral universe," explained Andreas Preuss, ceo Eurex.
EurexOTC Clear for IRS will fully integrate the clearing and collateralization of OTC and listed derivatives in a single clearinghouse under a single framework. As of today a number of Eurex’s clearing firms for the listed business are already technically connected to EurexOTC Clear for IRS and have started to perform functional tests in simulation. The new CCP offering for OTC interest rate swaps is one major element of Eurex Clearing’s roadmap in preparing for the regulatory environment. Further elements are Eurex Clearing Prisma, the new portfolio-based risk management system enabling cross margining of listed and OTC derivatives; Client Asset Protection including the Individual Clearing Model, a full individual segregation service already launched in August 2011 as well as omnibus segregation services.
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