The swap execution facility and swaps trading platform, trueEX, has developed a new solution to provide execution for Brazilian real (BRL) interest rate swaps cleared at CME Group. Following the launch, BRL swaps will be cleared and retrieved directly at CME Group without any middleware, according to a trueEX statement.
In addition, BRL swaps traders will be able to directly query their existing positions at CME via trueEX, just as they can with the 18 other currencies that are supported on trueEX.
Brazilian real interest rate swaps are one of the fastest growing currencies for the swap market. The trueEX launch of Mexican peso (MXN) interest rate swaps in January 2016 provided a new execution vehicle into MXN IRS clearing at CME Group. This was similar to the other interest rate swaps offered on the trueEX platform.
The trueEX’s step follows CME Group’s launch of BRL interest rate swaps clearing in Q4 2015, which has cleared more than 250 billion real in notional from 25 market participants.
CME Group is the only global clearing house that offers clearing in 19 IRS currencies including the Mexican peso (MXN), Brazilian real (BRL) and US dollar Swaptions (USD).
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Through its network of dealers, trueFIX offers asset managers and other institutional investors the ability to transact the full range of interest rate swap transactions while simultaneously processing hundreds of line items in a portfolio, regardless of the trade type.
trueEX and CME Group both introduced key contracts and have seen growing open interest in BRL interest rate swaps over the past year.
Commenting on the news, Sunil Hirani, CEO of trueEX, said: “We are excited to expand our important relationship with CME Group so that the benefits of execution, processing and clearing are available in this new, vibrant market.”
“Latin American markets have experienced substantial growth over the past year, and our clients have increased their voluntary clearing of MXN and BRL interest rate swaps,” said Sunil Cutinho, President pf CME Clearing.
“We are pleased to be working with trueEX in bringing these new services to market, so we can bring greater liquidity, transparency, and risk reduction services to these growing markets,” he added.