International Derivatives Clearing Group, LLC (IDCG) is, through its subsidiary International Derivatives Clearinghouse (IDCH), LLC, a central clearinghouse which provides an efficient and transparent forum to clear and settle interest rate swap contracts and other fixed income derivatives contracts.
Currently, OTC interest rate products trade on a bilateral basis using International Swaps and Derivatives Association, or ISDA, master agreements and corresponding collateral agreements. Trading is conducted primarily through a small number of dealers, and thus this market is characterized by subjective evaluation of transactions, a wide differential in price quotes, limited price transparency and counterparty credit risk.
The products listed by IDCG and cleared by IDCG are U.S. dollar-denominated IDEX Swap Future™ contracts (for thirty years of daily maturities). IDEX Swap Future contracts are traded on an exchange and also may be traded bilaterally and cleared through the IDCH using the SwapDrop™ product. IDCG intends to expand our product offerings to include IDEX Swap Future contracts across all G7 currencies, including the Euro, Japanese Yen and British Pound.
Our client base is served by creating normalized pricing data and a centralized clearing system eliminating the need for multiple bilateral credit relationships. IDCG also provides straight-through processing with little or no latency. Thus, trading liquidity and efficiency is enhanced while reducing transaction costs and mitigating ongoing counterparty credit risk associated with the current market dynamics.