Eurex launches “unique service” for cross-currency swaps and OTC FX

Rick Steves

Clearing and settling on a net basis across cross-currency swaps and OTC FX significantly reduces capital requirements under SA-CCR, the standardized approach for measuring counterparty credit risk.

Eurex has launched a “unique service” for cross-currency swaps and OTC FX that offers netted settlement guaranteed by Eurex Clearing.

Commerzbank, J.P. Morgan, and Morgan Stanley have gone live with the clearing service for deliverable cross-currency swaps and OTC FX.

The launch underscores Deutsche Börse Group’s ambition to support the move from OTC to central clearing. Eurex is the first clearing house to physically settle cleared cross-currency swaps in CLSClearedFX, CLS’s settlement service for cleared FX products.

CLS announces post-trade platform for Financial Market Infrastructures

Clearing and settling on a net basis across cross-currency swaps and OTC FX significantly reduces capital requirements under SA-CCR, the standardized approach for measuring counterparty credit risk.

CLSClearedFX provides liquidity and funding benefits while mitigating settlement risk. Eurex Clearing guarantees settlement in the service.

Erik Müller, Chief Executive Officer at Eurex Clearing, said: “Central clearing and guaranteed settlement for cross-currency swaps in CLSClearedFX is a world first. We are pleased to have launched this together with CLS to deliver capital, liquidity and settlement benefits – providing further resilience to the market.”

Keith Tippell, Global Head of Product at CLS, commented: “The addition of Eurex Clearing to CLSClearedFX, our settlement service for cleared FX and derivatives, demonstrates the benefits we can deliver to market participants by collaborating with other market infrastructures to further mitigate systemic risk.”

Jochen Litzinger, Divisional Head of the Interest Rates, Currencies and Commodities Trading (IRCCT) Cluster at Commerzbank AG, added: “Eurex Clearing has addressed significant complexity in implementing clearing and guaranteed settlement of these products, providing capital savings and operational efficiencies. It has been an important project on our side to innovate in the FX market, where we received significant support from Sernova Financial to structure our clearing workflows across different central clearing parties in the most efficient way. We are delighted to be part of this service.”

Charles Bristow, Head of Rates, Fixed Income Financing and Credit Portfolio Trading at J.P. Morgan, noted: “Cross-currency swaps play an important role in the flow of capital through the international markets. Moving to a centrally cleared model is a significant moment for the asset class as it reduces complexity, enhances efficiency and increases market resilience.”

Marco Gregotti, COO for Macro Products at Morgan Stanley, said: “We support the growth of post trade services for currency swaps and FX markets and are pleased to be part of the Eurex offering.”

Eurex offers OTC FX clearing in FX Spot, FX Forward and FX Swap, which is matched on 360T, Deutsche Börse’s global FX unit. The launch of non-deliverable forwards (NDF) clearing is scheduled for the second half of 2021.

Later this year, Eurex Clearing will offer clearing for both deliverable and non-deliverable FX products, thus providing further capital and operational efficiencies to Clearing Members.

Read this next

Retail FX

Interactive Brokers adds 680k accounts, daily trades hit two-year high

Interactive Brokers LLC (NASDAQ: IBKR) recorded 2.44 million daily average revenue trades (DARTs) in February 2024, marking a notable increase from the 2.2 million transactions observed in the previous month. This figure represents the highest DARTs reported in two years, indicating an 11 percent monthly surge and a 15 percent year-on-year rise.

Retail FX

Financial Commission adds Ultima Markets to membership roster

Multi-asset brokerage firm Ultima Markets, operating under the trading name Ultima Markets Ltd, has been granted membership of the Financial Commission, marking the most recent inclusion into the ranks of the self-regulatory organization.

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)

Opinion

Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

<