18 December 2017
visit www.ebaday.com

Credit derivatives clearing facility to launch in Q3

29 May 2008  |  8476 views  |  0 globes - map of earth

The Clearing Corporation (CCorp) has inked an agreement with the Depository Trust and Clearing Corporation (DTCC) that will result in the launch of a central clearing facility for over-the-counter (OTC) credit derivatives in the third quarter.

Chicago-based CCorp said in December last year that it had completed a major restructuring that transferred ownership of the organisation to 17 stockholders. The group's backers now consist of 12 of the biggest global dealers - including some of the largest credit derivatives dealers - along with three leading inter-dealer brokers, derivatives exchange Eurex and Markit Group.

The group said it would work to expand its product line to include a centralised clearing facility for a number of OTC derivatives products.

CCorp began working on developments with the DTCC earlier this year that would see it act as central counterparty for credit default swap transactions registered within DTCC's Trade Information Warehouse.

Now in today's statement CCorp says the initiative is targeted to launch in third quarter of 2008.

"The agreement with DTCC will allow CCorp members to utilise CCorp as the central counterparty (CCP) guarantor for OTC contracts in credit derivatives while continuing to utilise the Warehouse as the 'golden' record for net open positions and for post trade event processing," says CCorp in the statement.

Michael Dawley, CCorp chairman, says the new facility will "improve capital efficiency, increase regulatory transparency, lessen direct counterparty risk and reduce systemic risk relating to the multi-trillion dollar market in credit default swaps".

Initially the new service will support only CDX North American high yield and investment grade indices. CDS products such as iTraxx indices, index tranches, and single name products are scheduled for subsequent roll outs throughout 2008 and 2009.

In the initial phase, joint CCorp and DTCC Warehouse members whose OTC credit derivative trades are stored in the Warehouse can elect to replace their bilateral agreements with a new CCP guaranteed trade backed by the CCorp.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

LCH.Clearnet and DTCC in merger talks - report

LCH.Clearnet and DTCC in merger talks - report

29 April 2008  |  9453 views  |  0 comments
CCorp takes on new shareholders to target OTC markets

CCorp takes on new shareholders to target OTC markets

21 December 2007  |  7301 views  |  0 comments
Morgan Stanley increases Clearing Corp stake

Morgan Stanley increases Clearing Corp stake

12 January 2007  |  5041 views  |  0 comments
GFI and Icap acquire stakes in the Clearing Corporation

GFI and Icap acquire stakes in the Clearing Corporation

22 December 2006  |  7899 views  |  0 comments
CLS to provide payments finality for DTCC credit derivatives utility

CLS to provide payments finality for DTCC credit derivatives utility

13 December 2006  |  6334 views  |  0 comments
DTCC launches Trade Information Warehouse for OTC derivatives processing

DTCC launches Trade Information Warehouse for OTC derivatives processing

15 November 2006  |  7899 views  |  0 comments
DTCC to create OTC post-trade processing utility

DTCC to create OTC post-trade processing utility

14 February 2006  |  9797 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.atos.netvisit www.thomsonreuters.infovisit www.aciworldwide.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11292 views comments | 3 tweets | 4 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
10276 views comments | 21 tweets | 24 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7794 views comments | 19 tweets | 22 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7516 views comments | 5 tweets | 11 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7435 views comments | 6 tweets | 26 linkedin

Featured job

Find your next job