Eurex Clearing: Successful Start Of Partnership
Eurex Clearing, one of the world’s leading Central Counterparties (CCP) and part of Deutsche Börse Group, notes a strong increase in demand for its OTC clearing services.
In January, the Average Daily Volume cleared in the OTC interest rate segment increased by factor seven to €35 billion from €5 billion in 2017. “We are very pleased that our partnership program is gaining broad market support”, says Eurex Clearing CEO Erik Müller.
Eurex Clearing’s partnership program is designed to create a liquid, EU based alternative for the clearing of interest rate swaps.
The CCP shares a significant part of the economics of its interest rate swap segment with the ten most active participants. In addition, it opens up its governance structure, thus ensuring that clients participate in the strategic development of Eurex Clearing. Since its launch in October 2017, the program received broad market acceptance with 25 market participants from the US, the United Kingdom, Asia and Continental Europe joining.
The successful start eases any market concerns around price quality and overall costs for the industry. “We observe an increasing number of banks now quoting the same spread for Eurex Clearing and LCH cleared swaps. This provides end clients such as investment funds, insurance firms and pension funds with real choice for the first time.”
Eurex Clearing will continue to strengthen its offering to best support the market.
Phase 5 of the uncleared margin rules (UMR) took effect from September 2021.
Temporary equivalence is set to expire on June 30 2022.
IRS trading volumes have fragmented without an equivalence agreement.
Phase 5 of the uncleared margin rules came into effect on 1 September.
Triparty repos can be executed across U.S. Treasury securities to central clearing.