Effective Monday, April 18, 2011, Chicago Mercantile Exchange Inc. will offer initial clearing services for non-deliverable forward (NDF) over-the-counter (OTC) U.S. dollar/Chilean peso spot, forward and swap transactions. Parties to transactions in cleared OTC contracts shall be limited to “eligible contract participants” as defined in Section 1a(12) of the Commodity Exchange Act. Cleared OTC U.S. Dollar / Chilean Peso NDF transactions, the first of a broader NDF product suite to be rolled out at a later date, is the initial phase of CME plans to introduce clearing services for a wide range of OTC FX spot, forward, swaps; and options on FX spot and forward contracts. OTC FX transactions that are executed bilaterally through brokers, ECNs or other FX trading platforms, when submitted to the CME Clearing House, are novated for purposes of clearing and application of financial safeguards, bookkeeping, trade processing, and final delivery or cash settlement. These contracts will be carried in the new OTC sequestered account class.
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