News Release

CME Group to Expand Its OTC Clearing Capabilities to the Interest Rate Swap Market

Mon Jul 21 2008

CHICAGO, July 21 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, today announced that CME Cleared Swaps are scheduled to launch on Tuesday, September 2, 2008. CME Cleared Swaps will offer the over-the-counter (OTC) interest rate market the first ever, centrally-cleared interest rate swap available to all market participants. The exchange will provide clearing for the new product through CME Clearing's OTC clearing solution known as Clearing360™.

CME Cleared Swaps are standardized, forwarded starting International Monetary Market (IMM) dated swaps. Maturities will initially range from three months to 10 years as well as Overnight Index Swaps for IMM dates. The swaps will be marked to market daily by resetting the fixed rate to the settlement price. As an OTC product, trades are privately negotiated between two counterparties and are then submitted for clearing. Trades can be submitted either through CME Group's web-based Front-End Clearing System or using Swapstream's sPro™ trading platform. Swapstream is a wholly-owned subsidiary of CME Group.

"CME Cleared Swaps will deliver significant benefits to the interest rate swap market by offering all market participants the post-trade efficiencies and financial safeguards previously only available in exchange-traded products," said Robin Ross, managing director, CME Group interest rate products. "With CME Clearing as the central counterparty to every transaction, the counterparty risk inherent to bilateral OTC trades is substantially reduced. Risk management is enhanced by immediate trade confirmations and neutral, third party mark to market. The standardized product will broaden participation in the interest rate swap market by removing the need for ISDA master agreements and will create much-needed balance sheet efficiencies through automatic netting of positions."

CME Cleared Swaps will be available as both U.S. dollar denominated and euro denominated interest rate swaps. The U.S. dollar denominated swap maturities will be based on fixed and floating quarterly payments. The euro swap maturities will be based on fixed and floating semiannual payments. For more information on CME Cleared Swaps please visit

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.

CME Group ( is the world's largest and most diverse derivatives 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 NASDAQ under the symbol "CME."

The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex and E-mini, are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. All other trademarks are the property of their respective owners. Further information about CME Group and its products can be found at



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