Traiana has signed up its first central counterparty clearinghouse, CME Clearing, to its Harmony network.
Traiana says it has started offering real-time straight-through processing connectivity through the Harmony network to parties wishing to link to CCPs for foreign exchange trades, in preparation for forthcoming regulations in the US and Europe.
The move is an extension of Traiana’s existing post-trade workflow services for the FX marketplace. Traiana Harmony provides connectivity between prime brokers, executing brokers, buy-side firms and execution platforms.
“Traiana already has the expertise, knowledge and live applications to automate non deliverable forwards and FX options post-trade,” says Gil Mandelzis, CEO, Traiana, says. “We are working closely with our clients and partners to expand these services to cover CCP related flows while maintaining the integrity of the connection and a consolidated view.”
Roger Rutherford, CME Group’s managing director of FX products, says, “CME Group has made significant steps towards developing a clearing solution for the OTC FX market, both interbank and client, and has been working closely with many participants from all areas of the FX industry.”
He adds that the connection with Traiana, which supports over 500 financial institutions, will make its service available to a broad range of participants in the market. The companies will together process trades “in the coming months”.
Regulators globally are working on rules to steer as many OTC derivatives transactions as possible to clearinghouses to reduce risks to the financial system. While there is still uncertainty over which FX products will be mandated to be cleared, most participants accept that FX options and non-deliverable forwards will be.
In the US, FX swaps and forwards are included under the clearing requirements unless exempted from the definition of a ‘swap’ by the US Treasury and therefore waived from mandatory clearing. A decision on this is expected by the middle of July.