Cinnober has delivered a significant expansion to Liffe, one of the world’s major derivatives exchanges. As a result, Liffe is the first exchange in the world to handle the processing and clearing of credit default swaps (CDS), through their award-winning Bclear service.
Liffe proudly announces today that Bclear now provides new and existing CDS market participants with the world’s first efficient platform for reducing operational and counterparty risks, while maintaining the pre-negotiation flexibility that OTC market participants value. CDS trades are negotiated and agreed away from the exchange, before being processed through Bclear and cleared through LCH.Clearnet, which stands as the central counterparty to all Bclear CDS transactions.
The first version of Bclear was delivered by Cinnober to Liffe back in 2005. Today’s service extension should be seen in the light of the massive discussion within the industry about regulatory and government pressure to move CDS into more transparent trading and efficient clearing. The lack of transparency and clearing within CDS trading is considered a major factor behind the ongoing financial crunch.
Duncan Niederauer, chief executive officer, NYSE Euronext says in an official statement: "We are pleased to announce that Liffe is the first exchange to deliver a clearing service for CDS contracts. This important launch delivers one of the highest financial priorities for governments and regulators globally."
Today’s launch also marks an important expansion of Bclear from a successful equity derivatives service to a wider cross-asset-class platform. Earlier this month Liffe also announced that it will launch a range of soft and agricultural commodity products on the Bclear service in the first quarter of 2009.
"Bclear is a really well-reputed and innovative service within the industry and we’re of course proud to be system developer behind Liffe’s success story", says Jan Arpi, ceo of Cinnober. "This is a great reference for us and yet another proof of our technology’s possibilities when it comes to the flexibility and scalability that new challenges and opportunities require."
This year has been full of successes for Cinnober, the system supplier behind ventures such as Alpha Trading System and Turquoise, which have attracted much attention lately. In addition to these major new initiatives, Cinnober has also created new business with Burgundy, the Nordic MTF, and HKMEx, the new commodity exchange in Hong Kong, as well as system upgrades and innovations for existing customers such as Liffe and the London Metal Exchange.