Eurex Clearing Clears First Cross-Currency Swap Transactions

J.P. Morgan and Morgan Stanley were the first OTC forex clearing participants for the CCP.

Eurex Clearing, a central counterparty clearing (CCP), announced this Thursday that its over-the-counter (OTC) foreign exchange (forex) clearing service is up and running, having cleared the first cross-currency swap transactions.

J.P. Morgan and Morgan Stanley were the first OTC forex clearing participants for the CCP, having submitted the first trades to be cleared through the service. Eurex Clearing’s OTC FX service currently offers interdealer clearing of EUR/USD and GBP/USD cross-currency swaps of up to 50 years’ maturity. 

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Part of the Deutsche Börse Group, Eurex Clearing, in addition to cross-currency swap transactions, also clears deliverable FX spots, FX forwards and FX swaps of up to two years which are executed at 360T, Deutsche Börse’s FX subsidiary.

Commenting on the announcement, Erik Müller, Chief Executive Officer of Eurex Clearing, said: “With the successful completion of these first transactions, we have taken an important step in delivering greater efficiencies to the FX market. 

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“Clients will benefit from significant capital relief and cost savings when centrally clearing their OTC FX exposures. Our objective is to build a cleared FX liquidity pool over time, as further clients decide to utilize our new FX clearing services.”

Eurex Clearing plans service extensions in 2020

In 2020, Eurex is planning to extend the service by launching client clearing. This will allow clients of Eurex and 360T to increase their operational efficiencies by using a single clearinghouse across multiple exchange-traded and OTC forex products, the statement said.

“Cross currency swaps play an important role in the flow of capital through the international markets,” added Charles Bristow, Head of Rates, Fixed Income Financing and Credit Portfolio Trading, J.P. Morgan.

“Moving to a centrally cleared model is a significant moment for the asset class as it reduces the complexity linked to large bilateral counterparty exposures, enhances resource efficiency and increases overall marketplace resilience.”

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