IntercontinentalExchange Group (NYSE: ICE) and The Depository Trust & Clearing Corporation (DTCC) today announced plans to transition the clearing of interest rate futures listed on Nyse Liffe U.S. from New York Portfolio Clearing (NYPC) to ICE Clear Europe centralizing the trading and clearing of ICE's global interest rate product portfolio.
NYPC's operations will be wound down and open interest transferred by the third quarter of 2014, subject to regulatory approval.
Further extending the strong relationship between NYSE and DTCC, ICE has assumed NYSE's license for futures on the DTCC GCF Repo Index®. ICE and DTCC are also in discussions regarding a new cross-margining solution that would offer capital efficiencies across a broader range of global interest-rate products. Lynn Martin, CEO of NYSE Liffe U.S. will serve as the CEO of NYPC through the transition and wind down period.
"DTCC is dedicated to delivering to our clients innovative and effective solutions that help them preserve capital and reduce risk for the trading of a wide range of investment instruments," said Murray Pozmanter, managing director and general manager, Clearing Services, DTCC. "We believe there are great benefits and cost savings in cross-margining and we are pleased to be working with ICE in exploring further ways to bring these types of capabilities to our mutual clients and the industry at large."
"ICE has always been focused on customer needs by providing innovative solutions to business and regulatory concerns," said Lynn Martin, CEO, NYSE Liffe U.S. and CEO, NYPC. "We believe that the centralization of clearing services for our global interest rate futures provides customers with significant capital and infrastructure efficiencies at a critical time."
Since its launch in July 2012, futures on the DTCC GCF Repo Index® have experienced widespread market adoption with a diverse range of banks, hedge funds and asset managers adopting the product as a tool for their risk management needs. Open interest in the product complex has reached an all-time high as more market participants integrate these products into their global portfolios.
NYPC has saved members approximately $40 billion in margin associated with fixed income and futures portfolios since coming to market in March March 2011. In recognition of its innovative cross-margining capabilities, NYPC was awarded "Best Innovation by a Clearinghouse, North America" by Futures and Options World in 2011.