May 31, 2012
Eurex OTC Clearing Services – Full update
On Monday 21st Eurex provided an update on the details of their plans to move into OTC clearing. Highlights were:
- Timing (page 7 in the PDF below)
- Technical readiness at end of March 2012 (so now): You could login to a test environment and experience the whole system
- Production readiness at end of June: To include IRS, OIS, FRAs
- Upgrade by end of 2012: securities for VM, feed to trade repository, zero coupon swaps, more currencies, TriOptima integration
- Upgrade in 2013: cross margining between OTC and ETD, more products. Have a look at page 22 onwards for examples of the IM savings when offsetting OTC and ETD.
- Full Individual Client Segregation (ICS), should you want it. Page 28 in the PDF
- Eurex Clearing OTC offering
- Planned OTC equity derivatives: Total return and variance swaps and other option structures on EURO STOXX 50®, DAX®, SMI® and individual equities
- Planned OTC interest rate derivatives: IRS – fixed versus floating, basis, OIS and FRA’s European currencies – EUR, GBP, CHF, SEK, NOK, DKK, PLN and other – USD
- Connectivity to MarkitSERV or Bloomberg VCON
A solution allowing securities to be posted against VM would be good for the buy-side, but poses at least one problem: What if the receiving party doesn't accept this approach? Maybe this only works for pairs of firms who agree to see their VM covered by securities. I assume this also means there would be no PAI in this situation, as no cash is moving, so no P&L effect of receiving cash. And most interesting is that I was told to expect announcements about support for these new services from the sell-side, soon. Full details in this PDF, kindly supplied by and in agreement with Eurex. Full contact details are on the second to last page for you to sign up ;-) Is anyone testing their solution? Will this service be the beneficiary of the European Commission's desire to see EUR products cleared on-shore in Europe?
