In late 2017, we announced that seven market participants had agreed to clear NDFs at CME Group, including three of the top four Emerging Markets FX liquidity providers, according to EuroMoney*. This new liquidity provision has enabled buy side clients to start clearing NDFs at CME, and three of the leading FCMs – Citi, Credit Suisse and Morgan Stanley – have cleared for their clients.
Strong continued successes in Latin America and Asia Pacific in Emerging Market IRS make CME the natural home for participants to clear FX NDFs. With uncleared margin rules contributing to balance sheet pressures as they expand to more market participants through 2020, CME is committed to providing the most cost-efficient OTC FX clearing solution for our global clients.
“Citi continues its industry leadership in the clearing space, by being one of the first FCMs to clear FX NDFs on CME. As the market continues to see pressure to reduce capital and collateral requirements, having a clearing solution that provides effective ways to both access liquidity and reduce costs is vital. Citi actively supports NDF clearing at CME, as a way for clients to maximize financial and operational efficiency.”
Mariam Rafi, Managing Director, Americas Head of OTC Clearing, Citi
“With continued demand in the marketplace for clearing solutions across OTC products, we are pleased to clear FX NDFs at CME for our customers, and we look forward to continuing to be a first mover in serving our clients in each market, region, and product that they demand. Together we will all drive the path forward in clearing, which provides clients the consistent ability to reduce systematic risk, while providing optimal capital utilization.”
William Black, US Head of OTC Clearing, Credit Suisse
“Clearing has proven to be key for customers to access liquidity while reducing counterparty exposure. Morgan Stanley is fully committed to supporting our clients as the FX clearing landscape continues to evolve, the addition of CME NDF clearing maintains our position as a global market leader in FX and Derivatives Clearing.”
Jason Swankoski, US Head of OTC Clearing, Morgan Stanley
CLEARING THE WAY FORWARD.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
