Credit Suisse outsources post-trade derivatives operations to FIS utility

Credit Suisse has become the latest bank to outsource its post-trade derivatives operations to a utility operated by FIS.

By Joe Parsons(2147488729)
Credit Suisse has become the latest bank to outsource its post-trade derivatives operations to a utility operated by FIS.
The utility, which was founded by tech vendor Sungard before it was acquired by FIS, will take on Credit Suisse’s post-trade futures OTC derivatives operations and technology.

Global Custodian wrote last year that as operational costs continue to mount for clearing banks, outsourcing certain functions to third-party vendors could be the way forward in seeking efficiencies. This followed the news that Barclays became the first bank to join the FIS post-trade utility.

With increased capital and leverage ratio requirements impacting banks, the cost to carry out swaps clearing could rise by five or six fold.

“As the market moves away from bilateral swaps and towards cleared products, Credit Suisse is better positioned to continue to deliver innovative solutions and products to our clients in the most efficient manner possible,” says John Dabbs, global head of prime derivatives services, Credit Suisse.

“We believe this Utility will transform the economics for derivatives market participants globally.”

The announcement comes as bank’s look to mitigate the increased costs of processing cleared derivatives trades in the wake of heightened capital rules from Basel III.

In addition, banks are seeing more workload to their day-to-day operations increase as more products become accepted for central clearing.

“Our vision for a derivatives utility uses FIS’ existing, market-leading IP to reduce operational risks and costs while increasing efficiency throughout the industry,” adds Marianne Brown, chief operating officer, institutional and wholesale, FIS.

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