Cboe Targets Regional Banks with UBS Credit Arrangement

Cboe FX announces today that UBS is acting as a Central Credit Intermediary (CCI) for certain counterparties wanting to access its platform, with an eye to bringing on more liquidity from regional banks. Under the new arrangement, regional banks or other financial institutions that might have limited bilateral credit can leverage UBS as a spot FX intermediary to alleviate this hurdle, settling all trades exclusively with UBS. The potential benefit of this for these institutions, according to the exchange, is that they will gain exposure to a greater number of Cboe FX participants despite the absence of direct credit relationships.
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ABN AMRO Offers Clearing for Eurex FX Futures

ABN AMRO Clearing today has started clearing Eurex FX futures and options for its clients. The group now provides immediate support for the “classic FX” derivative contracts with attributes including monthly and quarterly expiries, as well as the rolling spot futures product that is now live. “Our clients have made our decision to support the Eurex FX exchange traded derivatives offering very easy,” says Michael van Dijk, global product manager, FX, at ABN AMRO Clearing. “We consistently post over 20% market shares of transactions cleared on most relevant derivatives exchanges globally.”
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FIA Updates CCP Position Paper Following Nordic Default

The Futures Industry Association (FIA) has released updated recommendations to improve clearinghouse risk management following recent market developments. The developments in question are the placing of a member of Nasdaq Clearing’s Nordic market in default in September. The losses were sufficiently large to exceed the margin provided by the defaulter and the CCP’s own skin in the game and required the use of the commodities default fund. This was the first use of a default fund by a major CCP since a default on KRX, the South Korean exchange, in 2013.
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LCH Compresses $4.5 Billion in FX Outstandings

LCH says that its ForexClear members have reduced their notional outstanding by $4.5 billion through the use of the service’s compression solution. Citi and Standard Chartered Bank are among the first participants to actively compress their trades at ForexClear. Compression is the process by which clearing members and their clients can eliminate offsetting trades to reduce notional outstanding and the number of line items in a portfolio. Capital requirements such as those introduced under the Basel III leverage ratio have incentivised banks to reduce notional outstanding.
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LCH Gets Japan FX Clearing Approval; Clears First Swaption

LCH has received approval for an extension to its clearing licence from the Japanese Financial Services Agency (FSA). The licence extension was granted on 31 October 2018 and enables LCH’s ForexClear service to clear NDFs on behalf of banks and clients based in Japan. This latest approval comes in addition to LCH’s existing licence to clear non-Yen OTC interest rate derivatives in Japan, which was granted by the FSA in 2016. Prior to LCH obtaining this latest licence, Japanese customers could only access ForexClear through international subsidiaries.
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NEX, Eurex, Launch Repo Clearing Solution

NEX Markets has announced that BrokerTec Europe has worked with Eurex Clearing to launch a new clearing solution for the European repo market. The new clearing solution will be live by the end of 2018 and will allow existing BrokerTec clients to select to clear their repo transactions via Eurex Clearing. “This solution will allow market participants to consolidate their European repo and corresponding OTC and listed derivatives business under the single risk framework of Eurex Clearing, via the BrokerTec platform,” the firms say.
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CME Clears Final Hurdle for NEX Acquisition

CME Group has received clearance from the UK Competition and Markets Authority for its acquisition of NEX Group. This means that all of the conditions relating to regulatory and antitrust approvals for the deal have now been satisfied or waived. The boards of NEX and CME announced on March 29, 2018, that they had reached an agreement on the terms of a recommended share and cash acquisition of the entire issued and to-be-issued share capital of NEX. On May 18, 2018, NEX shareholders approved the terms of the acquisition.
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Eurex Makes FX Clearing Play

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.
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CME Runs First NDF Optimisation Cycle

CME Group says it has completed its first initial margin optimisation cycle in collaboration with Quantile Technologies, which generated over $1.2 billion in NDF clearing across multiple currency pairs from banks including Citi and Standard Chartered. CME announced its NDF service in late 2017 and started clearing at the start of this year with three futures commission merchants (FCMs), Citi, Credit Suisse and Morgan Stanley. With the ongoing implementation of the uncleared margin rules across both sell-side and buy-side firms, CME has been focused on delivering the greatest capital and margin efficiencies for our global clients, the exchange group says.
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GMEX, Demand Derivatives to Launch “Revolutionary” Futures Exchange

Demand Derivatives, a creator of what it terms “novel” derivative instruments, and GMEX Group, a provider of exchange and post-trade business technology solutions, have announced they will combine forces to launch what they term a “revolutionary” US-regulated futures exchange, RealDemand Board of Trade (RealBOT), and clearing house, RealDemand Clearing (RealClear). The new businesses are slated to open in 2019, subject to CFTC and SEC approval, and the two firms claim they will create “unique and complete solutions to problems currently affecting the futures industry”.
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