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Exchanges & Clearing

FX Volumes Dip on SGX Despite USD/CNH Surge The total volume of FX futures traded on SGX in July was 1.7 million, down 8% month-on-month, despite the exchange seeing record volumes in its USD/CNH futures. Although volumes were down last month compared to June, they were still up 124% year-on-year. The monthly decrease appears to have been driven by a decline in volumes on SGX’s INR/USD futures, with trading down 23% m-o-m but still up 81% y-o-y. The bright spot for SGX in July was trading on its USD/CNH futures, as a record $61.5 billion in notional was traded on these contracts, bringing the total volume of these contracts cleared to over $255 billion this year.
CME to Align FX Options Expiration With OTC Markets CME Group is planning to change the time that its FX options expire to 10 am EST. This change will begin with contracts expiring after June 9, 2019. Clients across time zones will be able to trade listed options that expire at the same time as most OTC contracts. "Aligning to the 10 am New York OTC convention makes it easier for global clients to take advantage of CME Group's leading electronic FX options platform and transfer risk more seamlessly between OTC and our cleared, deliverable solution," says Paul Houston, CME Group global head of FX products. "As more institutions need to comply with uncleared margin rules, we're extremely focused on providing a regulated FX options solution that is capital efficient."
Topple Named as Euronext London Head The Supervisory Board of Euronext has unanimously approved the appointment of Chris Topple as CEO of Euronext London, head of global sales and a member of the Managing Board of Euronext, subject to all relevant shareholder and regulatory approval. Topple, who worked extensively in brokerage and clearing services throughout his career, will oversee sales across all asset classes. He will take up his new role based in London on 15 October 2018. Paul Humphrey, current interim CEO of Euronext London and head of global sales, will remain in his current role as global head of FICC.
Derivatives Revenues Drive Profit Growth at SGX Singapore Exchange (SGX) today reported a net profit of S$363.2 million for the year ending June 30, a 7% increase from the previous year. This partially driven by a 12% increase in revenues from the exchange’s derivatives business, up to S$339.8 million, meaning that this business line contributed 40% of SGX’s total revenue. Loh Boon Chye, CEO of SGX, says: “FY2018 was a record milestone in our financial performance as we achieved our highest revenue since listing in 2000 and the highest profit in five years.
LCH Clears First SOFR Swaps LCH says it has cleared the first dollar interest rate swaps referencing the Secured Overnight Financing Rate (SOFR), which was identified last year by a committee established by the Federal Reserve as representing the best alternative reference rate for benchmarking dollar interest rate derivatives. SOFR was first published by the Federal Reserve Bank of New York in April 2018, LCH says Credit Suisse, Goldman Sachs and JP Morgan were among the first participants to clear swaps using the new rate.
LCH Goes Live with Deliverable FX Options Clearing LCH has launched deliverable FX options clearing. The move incorporates the first physical settlement service for cleared FX products, which LCH has developed in collaboration with CLS. FX options clearing will exist as part of LCH's ForexClear service, which currently clears around $70 billion in average daily volume. Paddy Boyle, global head of ForexClear at LCH, says: "Clearing FX options is an exciting milestone for LCH and the FX market. The launch of this service extends the benefits of clearing to more products and participants in the FX market, enabling them to benefit from the risk management, margin, capital and operational efficiencies of clearing. We're delighted to partner with CLS to deliver this innovative new service."
SGX Launches “Futurised” OTC FX Product Singapore Exchange (SGX), is launching a new product, SGX FlexC FX Futures, with the aim of “futurising” certain OTC FX product offerings. Targeted for launch on August 27, SGX FlexC FX Futures - developed in consultation with market participants - enable bilateral trades that are privately negotiated with tailored expiration dates to be registered and cleared like a standard SGX FX futures contract. This feature will be available for INR/USD, KRW/USD, TWD/USD, USD/CNH and USD/SGD contracts. Michael Syn, head of derivatives at SGX, says: "Access to counterparty credit, especially for tenors longer than spot, is increasingly scarce and expensive in the OTC FX markets.
IRD Clearing Outstrips Mandate: ISDA New research from the International Swaps and Derivatives Association shows that the incentives offered by regulators to clear standardised interest rate derivatives is having a positive impact with more notional value being cleared than is mandated by the US Commodity Futures Trading Commission. Encouraging the clearing of standardised derivatives has been a major priority for policy-makers and has primarily been pursued through the implementation of clearing mandates. ISDA says, however, that other incentives also exist – netting and capital benefits and the rollout of margining requirements for non-cleared derivatives, for example.
Clearing Mexican Peso Swaps Just Got a Little Easier IHS Markit’s MarkitSERV has expanded its global network of derivatives clearinghouses by connecting to Asigna, the clearinghouse for Mexican listed and standardised derivatives. With the new connection, it will provide standardised workflow and connectivity for matching, confirming and clearing Mexican peso TIIE 28 swaps. “With the connection between MarkitSERV and Asigna, we can offer our clients an efficient and secure channel to transmit confirmed TIIE swap data to our clearinghouse,” says Catalina Clavé Almeida, CEO at Asigna.  “It also helps global banks on the MarkitSERV network do business in our market.”
Coinbase Launches Institutional Crypto Suite Coinbase, a cryptocurrency exchange based in San Francisco, has launched a new suite of services aimed at institutional level market participants. With one of these services, Coinbase Custody, the firm says that it has leveraged its experience of safely storing more than $20 billion of cryptocurrency to create the most secure crypto storage solution available. “In partnership with an SEC-regulated broker-dealer, Coinbase Custody is proud to offer a service that couples Coinbase’s cryptocurrency security excellence with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer,” says Coinbase in announcing the news.