Eurex Clearing, Europe's leading clearing house, announced today that EurexOTC Clear for Interest Rate Swaps (IRS) successfully went live on 13 November 2012.
The launch was supported by Eurex Clearing's cooperation banks Barclays, Citigroup Global Markets Ltd., Credit Suisse, Deutsche Bank and J.P. Morgan. In addition, Commerzbank, HSBC, Royal Bank of Scotland, UBS and Basler Kantonalbank joined the service for the production start. All ten members have successfully cleared their first transactions via EurexOTC Clear for IRS. BNP Paribas, Goldman Sachs, Morgan Stanley, Nomura, NORD/LB, Société Générale and further market participants are preparing to join the service as clearing members. The support from major OTC dealers and Eurex Clearing's timely launch facilitate preparations for the onboarding of buy-side clients ahead of the start of the clearing obligation in Europe, which is anticipated to commence in the second half of 2013.
The new OTC clearing service is designed for the needs of clients focusing on safety and efficiency. Eurex Clearing's segregation solution - the so-called Individual Clearing Model -offers the strongest protection and portability with full individual segregation of positions and customer collateral. At the same time, the service will deliver capital efficiencies to promote cost efficient compliance with the new regulatory requirements based on a variety of factors including a cross-product service portfolio, a broad eligible collateral spectrum and Eurex Clearing Prisma, the planned portfolio risk management across listed and OTC derivatives.
"Launching a new OTC clearing service is a complex and challenging undertaking. Eurex Clearing has been very responsive in building a solution tailored to the specific needs of our buy-side clients. We see significant interest from buy-side firms for the EurexOTC Clear service and continue to work closely with Eurex Clearing and our clients to onboard in due time to meet the regulatory requirements and take advantage of the benefits from CCP clearing," said Piers Murray, Global Head of OTC Derivatives Clearing & PB at Deutsche Bank.
"Credit Suisse welcomes the expansion of OTC clearing in Europe. The Eurex Clearing platform offers our clients additional choice for clearing OTC products, which is especially important given the introduction of mandatory clearing requirements, and we're very pleased, therefore, to have cleared the first customer trade through EurexOTC Clear," said Alex Lenhart, European Head of Prime Services Listed Derivatives, OTC Clearing and FXPB at Credit Suisse.
Adam Husted, European Head of Product Development - OTC Clearing at Barclays stated: "We are delighted to work closely on this project with Eurex Clearing. We are confident that this initiative will result in a valuable, tailored clearing solution for our clients."
Hester Serafini, Head of Europe and Asia OTC Clearing at J.P. Morgan confirmed: "To deliver the full benefits to buy-side clients the industry needs to have Client Clearing Documentation finalized. Eurex Clearing - together with major market participants - is very engaged in this industry effort. Launching the service in mid-November allows clearing brokers and clients to get ready for the start of the European clearing obligation that we expect to begin in the second half of 2013."
Guus Warringa, Chief Legal Counsel, Member of the Board, APG Asset Management, said: "The clearing obligation will alter our business in an unprecedented way. A full segregation solution for clients, a capital efficient margining process and a broad range of eligible collateral are essential elements for us in any CCP offering. We welcome Eurex Clearing's OTC offering as it addresses major requirements of end clients."
"Over the last months we have jointly shaped our new clearing service. A lot of progress has been made with the support of market participants, and we are excited to deliver a superior solution for OTC client clearing in Europe. Based on our expertise in risk management and our established clearing of listed derivatives, we will be able to offer a strong solution in terms of product coverage, Client Asset Protection and capital efficiency," added Andreas Preuss, CEO Eurex.
With its new service EurexOTC Clear for IRS, Eurex Clearing will fully integrate the clearing and collateralization of OTC and listed derivatives in a single clearing house within one single framework. The new service, which will be further expanded in 2013, is one important element of Eurex Clearing's comprehensive roadmap in preparing for the changing regulatory environment.