Eurex Clearing, one of the world’s leading Central Counterparties (CCP) and part of Deutsche Börse Group, has developed a partnership program designed to further accelerate the development of a liquid, EU based alternative for the clearing of interest rate swaps. Eurex Clearing has designed the program in close consultation with major participants in the interest rate swap market including dealers, end-clients and execution venues. The performance based program aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance.
Eric Müller, CEO Eurex Clearing, said: “This market-led initiative will benefit clients and the broader market place through greater choice and competition, improved price transparency as well as reduced concentration risk.”
The highly efficient set-up of Eurex Clearing with a state of the art technology and risk management platform is the foundation for making this program a success for all stakeholders and the market as a whole. The ten most active program participants will be eligible for a significant share in the economics of the multi-currency interest rate swap offering of Eurex Clearing on a permanent basis. In addition, these clients will be included in the governance and committee structure of Eurex Clearing AG. Participation is open to all clearing members and Registered Clients of Eurex Clearing. The program is open for registration as of 9 October 2017. Clients who register for the program in the early registration phase until 20 November 2017 will benefit from an extra reward.
Bank of America Merrill Lynch, Citigroup, Commerzbank, Deutsche Bank, J.P. Morgan and Morgan Stanley are among the clients who already registered their early interest to participate in the Eurex Clearing Partnership Program.
Jerome Kemp, Global Head of Futures, Clearing and Collateral at Citigroup stated: “We welcome this market-led initiative to promote greater choice, flexibility and transparency for our global client base.”
Sam Wisnia, Global Head of Rates and FX at Deutsche Bank, said: “This program is a constructive contribution to help the market place navigate the political and regulatory challenges facing our industry.”
“This initiative will bring greater choice and transparency to the market as well providing the opportunity for greater risk diversification and resiliency. We view these as important developments to benefit all market participants,” said Charles Bristow, Co-Head of Global Rates Trading, J.P. Morgan.
More than 200 banks and buy-side firms are already connected to the interest rate swap clearing service of Eurex Clearing, among them all major US, UK and continental European banks active in this market. Eurex Clearing utilizes the proven and highly scalable technology and risk management systems of Deutsche Börse Group and has permanent access to the European Central Bank (ECB) through its full banking license. Eurex Clearing cleared around 180 million transactions per month in 2017 for its global client base across all asset classes. The notional cleared in interest rate swaps at Eurex Clearing has crossed 2 trillion in July 2017.