Eurex has reached an important milestone in the evolution of its FX ecosystem with the launch of portfolio margining between FX and fixed income derivatives and the readiness of both BNP Paribas and J.P. Morgan to support FX Futures execution via EFP (Exchange for Physical) workflows.

Through portfolio margining, clients can offset FX Futures and FX Options exposures against eligible fixed income positions held at Eurex Clearing. Developed in close collaboration with Union Investment as a buy-side partner, this market-led solution reflects client demand for greater funding and collateral efficiency.

At the same time, bank-led EFP execution services allow clients to access OTC FX liquidity and efficiently convert spot or forward transactions into cleared Eurex FX Futures.

On the first day of portfolio margining, Clearing Members and their clients realized margin offsets reaching 60 percent of the total FX initial margin, demonstrating the significant funding efficiencies available through portfolio-margining FX and fixed income positions at Eurex.

Why it matters

• EFP execution services enable clients to access established OTC FX liquidity through their banking partners and efficiently convert positions into Eurex FX Futures.
• Portfolio margining allows those cleared FX positions to benefit from offsets against Eurex fixed income portfolios, reducing margin requirements and improving funding efficiency.
• Together, they combine the best of both worlds: access to OTC liquidity and the capital efficiency of cleared listed derivatives.

This represents another important step in Eurex’ strategy to bring greater capital efficiency, risk management and liquidity access to the FX marketplace while leveraging the scale of its fixed income ecosystem.

Source: Eurex