CME Group announced that it will exit the company’s credit default swap (CDS) clearing business by mid-2018, freeing up $650 million in clearing member capital. Going forward, in order to meet customer needs in light of uncleared margin rules, CME will focus its over-the-counter (OTC) clearing services on interest rate swaps (IRS) and foreign exchange (FX), as well as on developing further capital efficiencies for market participants.
CME Group will work with CDS open interest holders and regulators to ensure an efficient and seamless transition for the credit market. During this transition, CME will continue to provide full clearing services so that participants can continue to manage their risk, including the roll to CDX 29. Pending regulatory approval, the company will provide fee waivers on CDS clearing, as well as facilitate the bulk transfer of open positions. Following the transition, CME will dissolve CME Clearing’s CDS guarantee fund, which will return $650 million to CDS clearing members.
The company also will accelerate additional OTC clearing innovations to provide further efficiencies to market participants, including:
- Launching OTC FX options clearing by the end of 2017.
- Delivering cleared OTC IRS in Chinese yuan, Chilean peso and Columbian peso by early 2018, which will bring the company’s industry-leading cleared IRS product scope to 24 currencies.
- Expanding capital efficiencies for OTC IRS and FX – an area where CME Group has the unique ability to deliver value on an ongoing basis due to offsets available between its listed and OTC FX and IRS products. Portfolio margining has generated an additional $2 billion in initial margin reductions for market participants in Q3.
More information on the company’s OTC products and services can be found at www.cmegroup.com/otc.
NEWSLETTER SIGN UP
And receive exclusive articles on securities markets
Celebrating women shaping European finance
European Women in Finance Awards deadline is Aug 23
#WomeninFinance #Finance #WIF
Nominate here: https://www.jotform.com/form/250276204100339
"Modernizing isn't just upgrading—it's reshaping how we deliver client value" - @Wedbush's Rodrigo Parrode
As Cboe Data Vantage scales globally, Adam Inzirillo discusses our APAC expansion, plans to launch dedicated cores in Canada and preparation for 24×5 U.S. equities trading, pending regulatory approval – full story in @marketsmedia: https://bit.ly/4kQx3mC
As Technology Evolves, Asset Managers Adapt and Innovate
Related articles
-
The combined firm has become the largest non-bank futures commission merchant in the U.S.
-
Marex will join GFO-X as a participant & join LCH SA’s DigitalAssetClear as a clearing member.
-
The first DLT-based collateral transaction for cleared derivatives initial margin has gone live.
-
LCH ForexClear is the first central counterparty to go live on the service.
-
Following recent European regulatory changes, there is potential for reducing complexity.
We're Enhancing Your Experience with Smart Technology
We've updated our Terms & Conditions and Privacy Policy to introduce AI tools that will personalize your content, improve our market analysis, and deliver more relevant insights.These changes take effect on Aug 25, 2025.
Your data remains protected—we're simply using smart technology to serve you better. [Review Full Terms] | [Review Privacy Policy] By continuing to use our services after Aug 25, 2025, you agree to these updates.
