CHICAGO, April 12, 2016 /PRNewswire/ -- CME
Group, the world's leading and most diverse derivatives
marketplace, today announced it has cleared its first interest rate
swaptions trade yesterday, April 11.
CME Group is the first clearing house to offer swaptions
clearing.
Five clearing members are approved to clear swaptions, including
Barclays, BNP Paribas, Citi and RBS plc. Several additional firms
are working through the process to become approved swaptions
clearing members.
"This groundbreaking solution is designed to help transform the
interest rate swaps landscape for CME Group's customers by offering
greater capital efficiencies and helping mitigate counterparty
risk," said Sunil Cutinho, President
of CME Clearing. "Delivering innovative products and services that
meet our customers' evolving needs is at the core of CME Group's
business, and we're proud to lead the way for the industry on
swaptions clearing."
"Barclays is proud to collaborate with CME Group as one of the
banks to execute the first cleared swaptions trade," said
Sabri El Jailani, Global Head of
Rates Options Trading for Barclays. "Clearing through CME will
allow both Barclays as well as our clients to significantly improve
the capital consumption and risk management of our swaptions
portfolios."
"As the cleared swap market evolves and new innovations come to
market, we at One River Asset Management want to be at the
forefront of improving the clearing landscape," said Ian Malloch, Chief Risk Officer at One River
Asset Management. "Clearing swaptions will allow us the
opportunities to streamline operational processes, mitigate risk
and actively manage margin exposure along with our existing
portfolio of cleared swaps."
"RBS plc is excited to be part of the first swaptions trade
cleared at CME Group," said Alan
Mittleman, Head of Rates Trading, Americas at RBS plc. "With
the cost of margin for non-cleared derivatives coming later this
year, we see voluntary swaptions clearing as a prudent way to
reduce risks and increase efficiencies in the swaptions
market."
"We are excited to work with CME Group and liquidity providers
to facilitate automated execution of cleared swaptions," says
Shawn Bernardo, CEO of Tullett
Prebon's Swap Execution Facility. "Our customers will greatly
benefit from having the ability to provide liquidity for cleared
swaptions, which will provide for greater capital efficiencies in
the marketplace."
"36 South is excited to see CME Group offering a cleared
solution for swaptions," said Neale
Jackson, Senior Portfolio Manager at 36 South. "Credit
Support Annex pricing discrepancies have increased the costs and
limited the potential counterparties in bilateral swaptions
trading, and the clearing of swaptions should bring additional
liquidity, trading flexibility and processing benefits to the
global marketplace. Furthermore, swaptions -- being an interest
rate product associated with sovereign risk -- can experience large
volatility at a time when counterparty risk may be a relevant
concern. Clearing has obvious advantages in this regard."
The initial product scope includes U.S. Dollar denominated
swaptions with European-style exercise, a maximum two-year option
expiry, and a maximum underlying swap tenor of 30 years.
For more information on swaption clearing at CME Group, please
visit www.cmegroup.com/swaptions.
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, energy, agricultural products and metals. Around
the world, CME Group brings buyers and sellers together through its
CME Globex® electronic trading platform and its exchanges based in
Chicago, New York and London. CME Group also operates one of the
world's leading central counterparty clearing providers through CME
Clearing and CME Clearing Europe, which offer clearing and
settlement services across asset classes for exchange-traded and
over-the-counter derivatives. CME Group's products and services
ensure that businesses around the world can effectively manage risk
and achieve growth.
CME Group is a trademark of CME Group Inc. The Globe Logo, CME,
Globex and Chicago Mercantile Exchange are trademarks of Chicago
Mercantile Exchange Inc. CBOT, the Chicago Board of Trade, KCBOT, KCBT and
Kansas City Board of Trade are
trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are registered trademarks of New
York Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc All other trademarks are the property of their
respective owners. Further information about CME Group (NASDAQ:
CME) and its products can be found at www.cmegroup.com.
CME-G
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SOURCE CME Group