News Release

CME Group Announces Clearing Services for OTC FX

Mon May 16 2011

CHICAGO, May 16, 2011 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of post-execution clearing services for over-the-counter (OTC) U.S. dollar/Chilean peso non-deliverable forwards (NDFs) through CME ClearPort.  

"This is the first step in our broader initiative to provide clearing services for a wide range of FX products later this year," said Craig LeVeille, CME Group's Director of FX Products.  "Chile has a strong economy generating large investment exposures to foreign assets.  Local institutions can use our clearing service to mitigate the growing credit constraints they face when hedging currency risks, and this should lead to a boost in liquidity and an expansion in cross border activity."

The initial product launch will be for NDF-style transactions for U.S. dollar (USD) versus Chilean peso (CLP), where original trades conducted in the standard "USD/CLP" interbank terms of Chilean peso per U.S. dollar, can be submitted for clearing.  This clearing service will benefit from daily valuation curves provided by ICAP, the world's premier interdealer broker and a leading provider of brokerage services to the Latin American FX markets. The key benefits of the offering include:

  • Mitigated counterparty risk - CME ClearPort uses a central counterparty clearing model, which allows the central clearing house to guarantee the performance of every transaction.
  • Expanded liquidity - With these clearing and risk services in place, existing accounts will now have the ability to free-up credit lines.
  • Enhanced operational efficiency - Post-trade clearing and processing with CME ClearPort eliminates significant documentation time.  All OTC FX positions sent to CME Clearing will eventually allow for the same powerful cross-margin efficiencies as exchange-traded FX futures and options.  Additionally, the availability of daily valuation curves will help counterparties in daily marking and position margining, which may serve as valuable risk mitigation for portfolios of longer-dated risk products.

CME ClearPort is a set of flexible OTC clearing services available to all OTC market participants to significantly mitigate their counterparty credit risk and provide neutral valuations. The open-access, platform-agnostic structure of CME ClearPort means customers have access to a post-execution clearing service that lets you control how, with whom and on what terms you trade – while increasing your security, efficiency and confidence.  CME ClearPort has nearly 1,000 products available for clearing across multiple asset classes.  There are about 16,000 registered users and average daily volumes are approximately 500,000 contracts.  

For additional information, visit: www.cmegroup.com/fxclearing.

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk.  CME Group exchanges offer 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.  CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago.  CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort®. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc.  CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc.  All other trademarks are the property of their respective owners.

ICAP is the world's premier interdealer broker and provider of post trade risk and information services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, foreign exchange, emerging markets, equities and equity derivatives through voice and electronic networks.  ICAP plc was added to the FTSE 100 Index on 30 June 2006.  For more information, please go to www.icap.com.

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SOURCE CME Group

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