Derivs - Clearing and Exchanges

LCH.Clearnet’s global interest rate swap clearing platform, SwapClear, has launched a new blended compression service in response to a growing need for more efficient use of capital and reduced operational risk.

ForexClear, LCH.Clearnet’s fx clearing service, has expanded its range of clearable currencies to include the Peruvian nuevo sol in response to both member and client demand.

Swap execution facility TeraExchange has launched the first regulated platform for bitcoin derivatives and a spot bitcoin price index in response to growing demand from global merchants, payment processors, miners and hedge funds for an efficient hedging tool.

The Chicago Board Options Exchange is in talks with the Financial Industry Regulatory Authority regarding an agreement for FINRA to provide certain regulatory services to the CBOE and C2 options markets.

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data form the International Swaps and Derivatives Association.

The over-the-counter Derivatives Regulators Group is looking at various approaches to resolve cross-border implementation issues, especially pertaining to organised trading platforms and how they can be regulated.

US regulation may mean investment managers that are operated and managed out of the US will have to constrict their trading to US counterparties, therefore introducing barriers to trading opportunities and hampering competition.

Calculating initial margin for uncleared over-the-counter derivatives is posing significant challenges for the industry and market participants need to look at adopting a standardised model to ensure consistency when calculating margin.

Swap documentation such as the International Swaps and Derivatives Association master agreements and credit support annexes — the contracts at the heart of so much wrangling between issuers and dealers in the supranational and agency bond market in recent years — are likely to be non-existent in the coming years for firms that only trade vanilla products. This is due to regulation that requires certain financial instruments to be cleared through central counterparty (CCP) clearing houses, writes Beth Shah.

The need for credit support annexes may be reduced due to regulation that requires some financial instruments to be cleared through clearinghouses and traded on swap execution facilities, according to market officials.

The US Commodity Futures Trading Commission has issued an order filing and settling charges against broker-dealer Merrill Lynch for allegedly failing to diligently supervise its officers', employees', and agents' processing of futures exchange and clearing fees charged to its customers. The Commission’s order requires the firm pays a $1.2mn civil monetary penalty.

Overall credit default swap notional that was reported to swap data repositories last week decreased by 27% from the previous week, according to data from the International Swaps and Derivatives Association. This follows a decrease of 30% from the week prior. Overall interest rates derivatives trading that was reported, also declined by 13%.