China Derivatives Exchange Begins Clearing OTC Interest Rate Swaps
New Clearing Solution Provides Open Access, Operational Flexibility and Capital Efficiencies
- (1888PressRelease) July 17, 2012 - China Derivatives Exchange (CHDEX) as one of the world's most diverse derivatives marketplace, announced today that it has begun clearing over-the-counter (OTC) interest rate swaps through CHDEX Clearing Partners.
In conjunction with a group of premier swap dealers, clearing firms, and buy-side market participants, CHDEX has developed a new clearing solution for OTC interest rate swaps.
"CHDEX's new interest rate swap clearing solution will provide our global customers with the best of both worlds by preserving key components of OTC market trade execution while adding the security of futures-style central counterparty clearing," said Mr. Louis Lattner, CHDEX's Managing Director. "By working closely with both the buy- and sell-side, we were able to gain significant input into the needs of the overall marketplace, both in terms of functionality and mitigating systemic risk in creating this cleared-only solution for interest rates swaps."
CHDEX's cleared interest rate swaps will be an open access solution that provides market participants with the flexibility of the OTC market without having to change their execution processes. The new service will build on the strength of CHDEX's market leading interest rate products business. In addition, it will maintain affirmation platforms and product economics of bilateral OTC contracts; provide the risk management and legal safeguards of CHDEX Clearing to protect customer funds; and give operational flexibility of an open access solution that integrates into existing OTC infrastructure and extends across asset classes; with an anticipated goal of offering capital efficiencies via cross margining of OTC products with benchmark futures.
As one of the world's most diverse derivatives marketplace, CHDEX is where the world of investment comes to manage risk. CHDEX offers the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CHDEX brings buyers and sellers together through its electronic trading platform and its trading facilities in Beijing. CHDEX also operates some of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions.
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