News Release

Swapstream Announces 33 Participants for CME Swaps on Swapstream, the First Centrally Cleared Interest Rate Swap

Mon Feb 04 2008

CHICAGO and LONDON, Feb. 4 /PRNewswire/ -- Swapstream, the market-leading multilateral electronic trading platform for interest rate swaps (IRS) and subsidiary of CME Group, today announced that 33 buy-side participants have committed to an Early Adopter Program (EAP) for CME Swaps on Swapstream, the first centrally-cleared interest rate swaps available to all over-the-counter (OTC) market participants. The new CME Cleared Swap Product will trade on Swapstream's sPro™ platform and will be centrally cleared through CME using its OTC clearing solution, CME Clearing360™.

The firms, representing a wide spectrum of US, European and Middle Eastern financial institutions, will lead the effort to bring this new and innovative product to the $271 trillion interest rate swap (IRS) market. They will be the first financial institutions to benefit from the balance sheet and operational efficiencies through central counterparty clearing and straight through processing, offered by CME Swaps on Swapstream.

The new participants include banks, mortgage banks, asset managers, hedge funds and proprietary trading firms:

  Abu Dhabi Commercial Bank
  Allston Trading, LLC
  BMO Capital Markets Corp.
  Bred Bank
  Capstone Investment Advisors
  Capula Investment Management
  Centaurus Capital Ltd.
  Citadel Investment Group
  Commerzbank Group Treasury
  Countrywide Financial Corporation
  DRW Holdings, LLC
  Elcano RV Fund
  Eurohypo AG
  Henderson Global Investors Ltd.
  Infinium Capital Management, LLC
  Julius Baer Investment Management, LLC
  Lancelot EAM AB
  Landesbank Berlin AG
  Malbec Partners, Inc.
  NewSmith Asset Management LLP
  Nylon Capital LLP
  Pictet Asset Management
  RGM Advisors, LLC
  Rho Trading Securities, LLC
  Rubicon Fund Management LLP
  Sanctum FI
  Telluride Asset Management, LLC
  The Clifton Group
  Threadneedle Investments
  Twinfields Capital Management
  Voyageur Asset Management, Inc.

Further participants are in advanced discussions and expected to join the program in the near future.

Under the program, participants have agreed to commit resources and to work closely with Swapstream and CME Group to be ready to participate in the beta and launch phases.

Joe Leitch of Rubicon Fund Management LLP said: "Like most firms, we are looking for the cost savings offered by this product but we also value that through it we are able to continue to conduct our business directly via our existing relationships."

Christian von Staudt, Head of Interest Rate Risk Management at Commerzbank Group Treasury, said: "We think that the time is right for the launch of a centrally cleared interest rate swap. The trend towards standardization of fixed income products is in full swing since the introduction of the Bund Future more than a decade ago. Swapstream is creating a similar powerful instrument this time with the focus on credit risk mitigation in the IRS market."

Diego Megia, Principal of Elcano RV Fund, said: "The recent credit crisis has emphasized how important it is to control our exposure and manage collateral and counterparty risk. CME Group and Swapstream bring us a product we need which will help us benefit from all the efficiencies of a clearing house without sacrificing the way we conduct our OTC business."

John M. Huber, Chief Investment Officer at Voyageur Asset Management, said: "The costly and laborious process of getting ISDA documents in place for our clients as well as the operational and capital inefficiencies associated with trading interest rate swaps has kept us from trading this product in the past. CME Swaps remove these obstacles and will allow us to enter the interest rate swap market efficiently. We look forward to working with Swapstream and bringing this new and innovative product to our client base."

Jerome Guiot-Dorel, Head of Interest Rate Swaps at Bred Banques Populaires, said: "The launch of this product will benefit from excellent timing. The subprime crisis which led to the LIBOR crisis has stressed the difficulties of managing a large book of swaps fixings. With this new tool, we will be able to handle the seasonality of LIBOR fixings much better. This product could transform the interest swap market."

Stephane Rio, CEO of Swapstream, said: "The commitment by this wide range of banks and investors to trade this first centrally cleared interest rate swap is a reflection of the very large appetite from OTC market participants to reduce their credit exposure, reduce costs and streamline processing of one of the most widely used OTC instruments. We are delighted with the confidence these organizations have expressed in our product and our platform."

CME Swaps on Swapstream are expected to launch in a beta phase by March 2008 and go live in the second quarter of 2008.

For more information on CME Swaps on Swapstream please visit or to learn more about connecting to Swapstream.

About Swapstream

Swapstream, a wholly-owned subsidiary of CME Group, is the first electronic platform designed specifically for trading interest rate swaps.

Swapstream's platforms enable users to benefit from the efficiencies of electronic trading without sacrificing the flexibility of traditional voice trading. Swapstream also offers exclusive access to CME Swaps on Swapstream, the first centrally cleared OTC Interest Rate Swap available to all market participants, which will offer the benefits and financial safeguards of clearing through CME Clearing. CME Swaps on Swapstream combines access to deep OTC swap liquidity pools with efficiencies previously only available to exchange-traded products. Professional traders will have access to cost- effective interest rate swap trading in established, liquid markets, with the benefits of low-overhead straight-through processing.

About CME Group

CME Group ( is the world's largest and most diverse exchange. Formed by the 2007 merger of the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on its trading floors. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate. CME Group is traded on the New York Stock Exchange and NASDAQ under the symbol "CME."

About Clearing360™

Clearing360 is an extension of existing CME Clearing services, offering customers the flexibility of OTC transactions with the risk management efficiencies of centralized clearing. These include central counterparty clearing, which offers greater capital and operational efficiencies, including risk offsets against related futures and options positions; risk management for the credit, operational and legal risks that customers face in OTC trading; and, because CME Clearing is the counterparty to every trade, the risk of default is virtually eliminated.

  The main benefits of CME Swaps on Swapstream include:
  -- Automatic netting of offsettable positions
  -- Operational simplicity through provision of the daily Swap Value Factor
     and use of standard FIXML
  -- The use of SPAN (Standards Portfolio Analysis of Risk), a methodology
     developed by CME in 1988 for calculating performance bond requirements,
     provides simple and appropriate provisioning of risk offset
  -- Favorable capital treatment through marking the swaps to market daily
     and banking these amounts

SOURCE: Swapstream

CONTACT: Jeremy Hughes, +44 207 796 7112, or Pamela Plehn,
+1-312-930-3446, both for Swapstream

Web site:

Corporate Communications

+1 312 930 3434