CME Group, the world’s largest and most diverse derivatives exchange, has signed a licensing agreement with Standard & Poor’s, the world’s foremost independent provider of indexes and data, to clear swaps on the S&P GSCI™ Excess Return Index. The S&P GSCI is the most closely followed benchmark for investment performance in the commodity markets.
The over-the-counter (OTC) product based on the index calculated by Standard & Poor’s will be accessible via CME ClearPort®, an open clearing service for more than 600 products, scheduled to begin on March 16 following certification to the Commodity Futures Trading Commission.
"In this environment of financial uncertainty, more and more customers are looking at the benefits available in a centralized clearing solution to manage counterparty risks," said Rick Redding, CME Group managing director of Products and Services. "This is one of many examples of our efforts to extend the benefits of CME ClearPort to new products and asset classes."
"The S&P GSCI is clearly the leading barometer for investment performance in the commodity markets," said Alex Matturri, executive managing director for Standard & Poor’s Index Services. "Standard & Poor’s is excited to bring additional flexibility to the marketplace by licensing this closely followed benchmark to our longtime exchange partner, CME Group."
Index customers have traditionally used CME Group futures and options contracts on grains, livestock, energy and metals to hedge the corresponding components of commodity indexes. With CME Clearing acting as the counterparty to every transaction, the risk of a third party credit default is virtually eliminated.
