NEX Markets to Launch New Clearing for BrokerTec Clients via Eurex

After working together with Eurex Clearing for some time, NEX Markets has just informed its clients about a new feature. The company’s anonymous dealer-to-dealer platform for the fixed income markets run via BrokerTec Europe Limited is connecting through Eurex to launch a new clearing solution for the European repo market.

The new product is expected to go live before the end of 2018. Customers of existing BrokerTec will be able to select Eurex Clearing to clear their repo transactions.

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The announcement is a major step for market participants which are aiming to consolidate their European repo and corresponding OTC and listed derivatives business. They will be able to do it through the single risk framework of Eurex Clearing, via the BrokerTec platform.

Clients of BrokerTec which choose to clear repo transactions will be able to optimize their cross-asset portfolios more efficiently.

Market Evolution

In light of the incoming Brexit event and the adoption of the new European securities settlement regime by the ECB called TS2, the news comes as a welcome addition.

BrokerTec and Eurex Clearing’s partnership will also enable the firms to target new clients and reach additional liquidity pools for central counterparty clearing.

Commenting on the news, the Member of the Executive Board, Eurex Clearing, Matthias Graulich, stated: “In the future, the scale and scope of our cleared markets will provide unique capital and balance-sheet netting opportunities for clients across repo and derivatives.”

Elaborating on the significance of the partnership between the firms, the Managing Director, of BrokerTec Europe, John Edwards said that working together with Eurex the connectivity offers to the company’s clients additional options for settlement of Special and GC Repo transactions.

“As the leading dealer to dealer trading venue for both Euro and Sterling denominated repos, there are emerging opportunities in a post- Brexit world, as well as a desire to extend and diversify the clearing choices that our customers have when trading repo,” Edwards said.

Earlier this month, Eurex Clearing announced its plans to expand its partnerships. The revised version covers funding and financing in the repos and foreign exchange segments.

Earlier this month, Eurex announced that the company is working on FX futures.