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Expand Your Interest Rate Opportunities
Whether you are a hedge fund managing risk from 30 days to 30 years, CME Group Interest Rate markets offer the most diverse suite of futures, options, and cleared OTC products offered on any exchange. With more than 40 million contracts outstanding in open interest, our Interest Rate products deliver greater capital efficiencies, plus the proven safety and security of CME Clearing. Please explore our interactive Interest Rate tools and free educational resources.

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Credit

 

Delivering security to the credit default swaps marketplace

Leveraging the CME Clearing best-in-class infrastructure, CME Group offers the most comprehensive cleared OTC credit default swap (CDS) solution available. This offering brings together a broad range of market participants and provides clearing for both dealer-to-customer and interdealer CDS trades. The foundation of our Cleared OTC CDS solution is the transparent and replicable margin process, operational efficiencies, and our customer protection mechanism which utilizes time-tested legal and regulatory frameworks, reducing systemic risk effects.

CME Clearing offers an open-access clearing solution for OTC CDS, building on the existing OTC market with CDS contracts that are economically equivalent to the current OTC contracts. Our solution incorporates proven structural benefits of the futures market to deliver:

  • Customer Protection
    A time-tested regulatory segregation and portability framework that protects both customer positions and margin in the event that a clearing member defaults
  • Point of trade clearing
    Clearing CDS trades real-time throughout the day, providing immediate cleared trade confirmation, significantly reducing the credit exposure between bilateral parties
  • Sound, transparent and replicable margin process
    A multi-factor portfolio margining regime specific to CDS products
  • Migration of existing trades
    Migration of legacy non-cleared positions to cleared trades, simplified through use of existing market infrastructure
  • Operational efficiency
    The ability for investors to leverage their existing relationships and connectivity with CME clearing members
  • Experience
    More than 100 years of experience in clearing, settlement and risk management

 

Straight-Through Processing From Multiple Views

With the CME Group Cleared OTC CDS solution, you can transact CDS trades as you normally do, but with the added benefits of central counterparty clearing. You can negotiate, execute and submit trades through approved affirmation platforms, with straight-through processing, full life cycle trade management, and back-loading of legacy bilateral trades to CME Clearing.

 

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Broad Product Scope

Our Cleared OTC CDS products comprise the highest volume Markit CDX indices and their single-name constituents. They are designed to mirror bilateral OTC contracts with standardized fixed coupons as defined by the ISDA, and adhere to ISDA DC resolutions. CME Group Cleared OTC CDS products will be settled as part of ISDA auctions.

Current products eligible for clearing include CDX NAIG Series 12, 13, 14, 15 and 16 indices, 5-year tenors. Future products will include:

  • Additional CDX NAIG, and HVOL and HY indices
    • Series 8 and higher
    • 3-, 5-, 7- and 10-year tenors
  • Single-name constituents of the CDX indices, as well as other liquid single names with IMM maturity dates up to 10 years

 

Next Steps

Establish a relationship with a participating CDS Clearing Member to initiate the on-boarding process and begin clearing your OTC CDS trades with CME Group.

 

 

For more information, including a list of CDS Clearing Members and access to the CDS on-boarding kit, visit www.cmegroup.com/cds.
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CME Group Hedge Fund Team

Tina Lemieux
Managing Director, Client Development & Sales - Hedge Funds
312 930 3151
tina.lemieux@cmegroup.com

Mark Thompson
Director, Client Development & Sales - Hedge Funds (U.S.)
212 299 2342
mark.h.thompson@cmegroup.com

Randy Warsager
Director, Client Development & Sales - Hedge Funds (U.S.)
212 299 2352
randy.warsager@cmegroup.com

Pierre Prunier
Director, Client Development & Sales - Hedge Funds (Asia)
+65 6593 5582
pierre.prunier@cmegroup.com