Eurex, an international derivatives exchange and a member of the Deutsche Börse Group, announced on Monday the launch of a centralized clearing service, Eurex Clearing, for deliverable cross-currency swaps and OTC FX. The launch came after a long testing phase of the platform.
The clearing members in the network include banking giants like Commerzbank, JPMorgan and Morgan Stanley, who also participated in the testing. In addition, the platform guarantees settlement in CLSClearedFX.
“Central clearing and guaranteed settlement for cross-currency swaps in CLSClearedFX is a world first. We are pleased to have launched this together with CLS to deliver capital, liquidity and settlement benefits, providing further resilience to the market,” said Eurex Clearing CEO, Erik Müller.
A Necessary FX Service
The official announcement detailed that the transactions on the clearing platform will be cleared and settled on a net basis, which significantly reduces capital requirements under SA-CCR.
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Eurex is an established player in the OTC FX clearing business. It matches FX Spot, FX Forward and FX Swap on Deutsche Börse’s global FX unit, 360T and is reporting a surge in key business metrics for several months. The company is now launching non-deliverable forwards (NDF) clearing that is scheduled for the second half of 2021.
The new platform will offer clearing services to both deliverable and non-deliverable FX products.
“The addition of Eurex Clearing to CLSClearedFX, our settlement service for cleared FX and derivatives, demonstrates the benefits we can deliver to market participants by collaborating with other market infrastructures to further mitigate systemic risk,” Keith Tippell, Global Head of Product at CLS, added.
“Cross-currency swaps play an important role in the flow of capital through the international markets,” Charles Bristow, Head of Rates, Fixed Income Financing, and Credit Portfolio Trading at JPMorgan, added. “Moving to a centrally cleared model is a significant moment for the asset class as it reduces complexity, enhances efficiency and increases market resilience.”