ABN AMRO Clearing, a global leader in derivatives clearing, announces its centralised OTC Derivatives Clearing Service will expand its offering with centrally cleared over-the-counter-traded Interest-Rate Swaps as of December 1st, 2010. The service will be available globally and extends ABN AMRO Clearing’s broad offering of exchange- and off-exchange-traded products worldwide by providing clients with instant access to OTC products across multi-asset classes.
The new service will help significantly reduce counterparty as well as systemic risk in the OTC market by shielding clients from running counterparty default risk on open swap positions while removing any risk- weighted capital requirements. This is occurring at a time when regulators and industry bodies globally are looking for ways to reduce risk within the massive OTC market. There is an estimated $418 trillion in exposure on the Interest-Rate Swaps market globally (source: BIS, December 2008).
The OTC Derivatives Clearing Service simplifies OTC trading for buy-side firms and meets demand in an area of substantial growth. ABN AMRO Clearing is the only clearing house allowing clients to trade on the OTC market with only one legal relation and one contract.
Building on years of leadership in derivatives clearing, the ABN AMRO OTC Derivatives Clearing Service offers a complete OTC trading solution generating operational cost and capital efficiencies. The fully automated OTC Clearing Service facilitates clients with an end-to-end solution providing trade capture, lifecycle management, confirmation control, settlements and reporting. Clients receive instant legal confirmation, settlement and direct trade allocation into their account.
Acting as principal on behalf of its clients, ABN AMRO Clearing, voted Clearing Service of the Year by Futures & Options World, negotiates and signs the legal master contracts (ISDA, Master Confirmation Agreement and Credit Support Annex) and performs daily collateral management to reduce counterparty exposure. ABN AMRO Clearing’s highly-advanced risk system combines all OTC traded products and exchange traded positions within the same asset class in order to generate optimal offset to the entire portfolio, i.e. no distinction is made between exchanges or counterparties the transactions are traded with.
“ABN AMRO Clearing is determined to remain at the forefront of this growth industry by helping financial institutions adapt to and keep up to date with the swiftly changing regulatory environment of clearing services,’’ says Alexander Jacobs, head of the OTC Derivatives Clearing Service at ABN AMRO Clearing. “With such an industry-leading service, we add value to our clients’ business as they benefit from our extended OTC product offering, a wide range of trading possibilities and expertise. By offering our clients a centralised service, we help make OTC trading easier and beneficial, while leading the way in cutting costs and gaining efficiencies for our clients.”
ABN AMRO Clearing, with its dedicated global teams of experienced professionals, covers all areas of the global clearing industry and ranks among the top 3 clearers in every time zone based on amount of turnover and market share thanks to a solid and proven concept.
