Eurex Clearing has announced plans to expand its Partnership Programme to cover the repo and OTC foreign exchange segments.
The business, which is owned by Deutsche Borse, says the design of the programme extension is complementary to the OTC interest rate derivatives segment, which started in January 2018. As part of its partnership programme Eurex Clearing “shares governance and economics with the most active programme participants”, meaning it is a profit sharing scheme.
The new FX segment of the programme is designed to deliver the benefits of clearing to OTC FX markets, which are still largely uncleared today, the firm says, adding that it is currently working with market participants to be the first major clearing house to offer a comprehensive cross currency swap clearing service.
In the past few years Deutsche Borse has made a significant move into the FX business, buying FX trading platforms 360T and Gain GTX.
For the repo segment, the firm says the aim of the programme is to increase choice and efficiency for market participants in special repo and general collateral instruments and to foster adoption and growth in the dealer-to-client repo business.
The new programme is targeting a start in Q1/2019 and Eurex says Commerzbank, Deutsche Bank, JP Morgan and Morgan Stanley have expressed an early interest to join both new segments. In addition, Citigroup, DekaBank and LBBW have indicated their interest to participate in the repo programme, it adds.
“The extension of the Partnership Program further enhances choice and innovation in the marketplace,” says Erik Müller, CEO of Eurex Clearing. “Market participants now can tap the full benefits of Eurex Clearing’s integrated value proposition across fixed income derivatives, Repo and FX markets.”
Charles Bristow, co-head of global tates trading, JP Morgan, adds, “JP Morgan has been an early supporter and design partner for the OTC interest rate derivatives clearing segment of the Partnership Program. We welcome the planned extension of this successful program which is aimed at broadening market participants’ clearing options for the new asset classes and increasing resiliency.”