SIX Introduces Multicurrency Swaps to Address EU IRS Clearing Needs

Thursday, 05/12/2024 | 15:04 GMT by Tareq Sikder

BME Clearing, part of SIX, now supports swaps in USD, SEK, NOK, CHF, DKK, and GBP.

Expanded clearing services comply with EMIR 3.0, requiring active accounts with European CCPs.

SIX, through its Spanish Central Counterparty (CCP) BME Clearing, has expanded its clearing services to include multi-currency swaps. This development follows the European Commission's EMIR 3.0 regulation, which requires market participants to maintain active accounts with European CCPs for clearing EUR-denominated Interest Rate Swaps.

Multi-Currency IRS Clearing Supported

José Manuel Ortiz-Repiso, Head Clearing & Repo ops., SIX, Source: LinkedIn

The extended service will now support IRS clearing in six additional currencies: USD, SEK, NOK, CHF, DKK, and GBP. SIX will continue to provide clearing for EUR-denominated IRS alongside these new currencies. The organization has also indicated that further expansion to include additional currencies may be considered in the future.

SIX offers clearing services across multiple asset classes, including derivatives on equity indices, single stocks, interest rates, energy commodities, and cash instruments. The service is presented as an alternative for market participants seeking compliance with the EU’s active account requirements for IRS clearing.

“By extending the scope of currencies supported, coupled with very competitive fees and unprecedented revenue share opportunities that are open to all members, SIX is ideally positioned as an attractive and cost effective alternative for the clearing of Interest Rate swaps in the Eurozone,” said José Manuel Ortiz-Repiso, Head Clearing & Repo ops., SIX.

Introducing Revenue-Sharing Partnership Programs

The offering includes a simplified pricing model aimed at reducing clearing fees and creating revenue opportunities for liquidity providers. Risk management tools, such as transparent risk models and margin simulation capabilities, are integrated with Independent Software Vendor solutions for clearing and collateral needs.

Client assets are protected under the LSOC (Legally Segregated, Operationally Commingled) principle, with flexible account structures supporting both house accounts and client clearing . Additionally, SIX offers partnership programs with revenue-sharing options and CCP fee savings for eligible participants.

“SIX is acutely aware of the ramifications pertaining to additional costs and the fragmentation of portfolios and thus strive to mitigate market pain points via the support of multi-currency denominated Interest Rate Swaps and cost efficiencies,” added Manuel Ortiz-Repiso.