The Chicago Mercantile Exchange is set to start clearing over-the-counter derivatives in Europe in May.
CME Clearing Europe, which received approval from the Financial Services Authority in December, says it will begin clearing more than 150 over the counter (OTC) energy and commodity derivative products beginning Friday, 6 May. The group has lined up 15 dealers as initial clearing members
Andrew Lamb, chief executive officer of CME Clearing Europe, says: "The start of clearing at CME Clearing Europe is timely in light of the need for enhanced risk management in commodity markets and the imminent legislative change mandating the clearing of OTC derivatives."
While the clearing operation will commence with commodity products, Lamb says the group plans to eventually move into the fledgeling, yet hyper-competitive, market for interest rate swaps.
"Our goal is to offer a full multi-asset OTC clearing service, building on CME Group's clearing experience as well as its established and growing European presence," he says.