Eurex sets launch date for CDS counterparty

Eurex sets launch date for CDS counterparty

Swiss-German derivatives exchange Eurex says it will launch a European counterparty clearing system for credit default swaps at the end of the month.

The new entity, Eurex Credit Clear, will be operational by 27 July and ready to start live clearing of European iTraxx indices and European single name CDS on 30 July 2009.

Confirmation of the launch date comes a day after IntercontinentalExchange committed to kick-start its European offering later this month.

Eurex Clearing says it has developed a "CDS-specific state-of-the-art risk management model".

Implementation has been supported by deploying application modules from Calypso Technology and the platform has been in production testing with 20 market participants since the end of the first quarter.

Eurex board member Thomas Book says: "The key challenge in developing Eurex Credit Clear was to design and build a new risk management solution specifically to meet the unique risk characteristics of CDS. This new service significantly strengthens our clearing capabilities with a sound, reliable and flexible engine to deliver central clearing initially for credit derivatives and subsequently also for further OTC-traded asset classes."

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