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CME ClearPort: Celebrating Seven Years of OTC Clearing

A Success Story Still in the Making
As CME ClearPort marks its seventh anniversary this week, we want to acknowledge not only its past growth, but also its current expansion.

There are now 700 different energy, metals, and agricultural commodities offered for clearing through CME ClearPort. Many of these contracts – crude oil, petroleum, the precious and base metals, and others – have global significance and help customers around the world mitigate their counterparty credit risk. Average daily volume is approaching 700,000 transactions, and is expected to increase as more products in more asset classes are added soon.

"We have used CME ClearPort in our business since its inception in 2002," said Javier Loya, Chairman and CEO of OTC Global Holdings. "We have become one of the largest users of CME ClearPort because of the value it adds to our customers’ business. CME ClearPort has adapted to market needs and the service allows our counterparties to transact with all other counterparties registered to CME ClearPort without setting up private credit agreements or ISDA agreements. The capital efficiencies and depth of market provided through CME ClearPort Clearing has helped our
business grow."


The multiples of seven are striking. More striking is this. In today’s market environment, with increased demand for OTC clearing services, CME ClearPort is a standout success.

Launched in Response to
Market Needs
When CME ClearPort was launched seven years ago, on May 31, 2002, as a clearing service for over- the-counter natural gas products, it was focused on customer needs after the Enron crisis. As market participants increasingly came to appreciate the security, value and savings that central clearing brought to their businesses, the number of contracts and the types available grew each year.

 

Contract Types Offered for Clearing Through CME ClearPort

2002 2003 2004 2005 2006 2007 2008 2009 (as of 6/1/09)
•  Natural
   gas
•  Electricity		 •  Coal •  Crude oil
•  Petroleum		 •  Freight •  Metals •  Ethanol
•  Softs
•  Uranium		 •  NGL/Plastics
•  Steel
•  Green
   products		 •  Grain
   swaps
•  GSCI
   swaps


Offering Financial Integrity and Security
Today, CME ClearPort accommodates 10,000 global registered users, and the list of contracts across asset classes keeps growing to meet customer needs. We are in constant contact with market users and customers around the globe, working to understand their risk management needs and designing c clearing services to meet those needs. In 2008, 141 new contracts were offered for clearing through CME ClearPort. This year so far more than 100 additional contracts have been added to the contract slate, and others will be announced as the year continues.

More than ever, OTC market participants want to know they can count on the creditworthiness of their business partners. CME ClearPort provides that assurance.

"CME ClearPort offers a flexible, scalable post-trade clearing solution," said Chris Mudry, Chief Risk Officer, Mercuria Global Energy Solutions. "We appreciate the counterparty risk mitigation the service provides. We look forward to working with CME Group as they extend CME ClearPort to further markets in the future."


All CME ClearPort transactions are cleared by CME Clearing. In its more than 100-year history, there has never been a failure by a clearing member to meet a performance bond call or its delivery obligations; nor has there been a failure of a clearing member firm resulting in a loss of customer funds.

Central clearing has long provided the solid foundation of the futures industry. CME ClearPort has further validated that business model and taken it to the next step, by providing financial integrity and security to off-exchange transactions.

That is something to celebrate and to keep watching, as CME ClearPort continues on its
growth trajectory.