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August 19, 2013

NASDAQ OMX Zoom into Second Place in European Rate Swap Clearing

OMX put out a press release on their IRS volumes and revealed they have a healthy trade flow, plus they are providing their members with a cross-margining solution for IR products beyond anything on offer at any other OTC IRS CCP.

http://www.nasdaqomx.com/newsroom/pressreleases/pressrelease/?messageId=1202170 Stockholm, August 19, 2013 — NASDAQ OMX (NASDAQ: NDAQ) announces that the total cleared volume of SEK denominated interest rate swaps (IRS) has reached SEK 100 billion, equal to €12 billion, making NASDAQ OMX Clearing the second largest IRS clearing house in Europe. Clearing of SEK IRS was introduced in 2012 and members began submitting interbank trades on April 22, 2013. “Our progress has been strong with more than 10% of all interbank trades now cleared at NASDAQ OMX Clearing,” said Hans-Ole Jochumsen, Executive Vice President Transaction Services Nordics, NASDAQ OMX. “Our commitment to provide our members with derivatives clearing services that meet their objectives and reporting requirements in the new regulatory environment is gaining traction among the investment community. Thanks to close co-operation with the Nordic banks, we’ve been able to create a service that brings cross-margin benefits and capital efficiency to our members.” The cross-margin offering provides margin off-set between OTC interest rate derivatives and other cleared interest rate derivatives. NASDAQ OMX Clearing has a total daily average cleared volume of SEK 130 billion, (€15 billion) in Nordic interest rate derivatives.

The cross margin offsets are defined in this paper (page 6):  http://www.nasdaqomx.com/digitalAssets/86/86504_app_11_130708.pdf.  According to spokesperson at OMX: "A maturity matched IRS vs. a 10Y Gov’t Fwd have a 64% lower initial margin compared to the two positions on a stand-alone basis.", and "Members make full use of the cross-margining today".

OMX Monthly IRS Cleared Volumes OMX Monthly IRS Cleared Volumes

 

By comparison the latest figures at Eurex show around €1bn of cleared IRS, and the latest at SwapClear at €419trn. Members of the OMX IRS Service include:

  • Danske Bank
  • SEB
  • Handelsbanken
  • Swedbank
  • Nykredit
  • Swedish National Debt Office

Full release here: NASDAQ OMX Newsroom – Press Release – NASDAQ OMX.


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