CIBC announced today that it has signed a letter of intent to join LCH.Clearnet Ltd's (LCH.Clearnet) SwapClear, a global clearing service for over-the-counter (OTC) interest rate swaps.
By joining SwapClear, CIBC will be able to meet clearing requirements that the bank's U.S. counterparties will be subject to under the Dodd-Frank Act concerning interest rate swaps. CIBC will also be well-positioned to be in compliance with G20 commitments concerning OTC derivatives by the December 2012 deadline.
Separately, Toronto-Dominion Bank Group (TD Bank) has announced its intention to join SwapClear, LCH.Clearnet Ltd's (LCH.Clearnet) market leading over-the-counter (OTC) interest rate swap clearing business. The bank has commenced implementation and will begin clearing its IRS business as soon as this is completed.
Headquartered in Toronto, Canada, with 81,000 employees in offices around the world, The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group. TD Bank offers a full range of financial products and services to approximately 19 million customers worldwide.
"TD Securities is committed to being a leader in the OTC market. In joining SwapClear we gain improved transparency, reduce risk, better manage capital and balance sheet exposures and move a step closer to conforming with emerging global standards," said Mark Faircloth, Vice Chair, Rates & Foreign Exchange, TD Securities.
Michael Davie, CEO, SwapClear, LCH.Clearnet said: "We are delighted to welcome such an important player in the market to SwapClear and look forward to supporting them as they fully prepare for the changes the G20 commitments will bring. SwapClear is a constantly evolving service, offering new and enhanced products and adapting as new regulations become effective. We work closely with all participants to ensure that our offering develops in line with the needs of the market."
Separately, BMO Financial Group (BMO) is the latest bank to announce its intent to join SwapClear, LCH.Clearnet Ltd's (LCH.Clearnet) market leading over-the-counter (OTC) interest rate swap clearing service. BMO has commenced implemeplementation and will go live as soon as this is completed.
Established in 1817, BMO Financial Group is the oldest and the fourth largest bank in Canada serving more than 11 million personal, commercial, corporate and institutional customers in North America and internationally.
Patrick Cronin, Executive Managing Director at BMO Capital Markets said: "SwapClear membership will allow our Trading desks to efficiently manage our market risks and continue to service our core clientele in North America and abroad. We have begun implementation and expect to go live later this year. We are monitoring developments in financial regulations and will continue to adjust our trading approaches and memberships to accommodate ongoing client facilitation across all of our core markets. As a leading provider in the Canadian and USD swap markets, our SwapClear membership represents an important next step in our continued participation in the global IRS market."
Michael Davie, CEO of SwapClear, LCH.Clearnet said: 'We are delighted to be providing a member of such calibre with our proven and reliable OTC clearing services. We fully support the regulatory aims to increase stability within the financial system and remain committed to enhancing the service we provide to deliver transparency and certainty to the global IRS market."
LCH.Clearnet's market leading interest rate swap clearing service, SwapClear, has cleared over 1.5 million OTC IRS trades since launch in 1999. It currently has 49 clearing members and its portfolio contains 850,000 trades with a notional value in excess of $266 trillion, down from $305 trillion as a result of terminating $39 trillion cleared IRS transactions through on-going compression. SwapClear's FCM (Futures Commission Merchant) service, launched this month, has increased choice for U.S. based customers, enabling them to clear with the world's leading interest rate swap service within a familiar framework.