The Clearing Corporation (CCorp) and Eurex Clearing have finalised how their Global Clearing Link will work.
The link aims to give customers a choice of clearing through Eurex Clearing and CCorp for US Dollar-and Euro-denominated products traded on Eurex US and on Eurex in Europe. The goal is to achieve collateral pooling and margin offsets for clients that lead to margin savings the two CCPs put at over US$2.5 billion.
“Our Global Clearing Link with The Clearing Corporation will offer unprecedented opportunities for customers on both sides of the Atlantic,” says Rudolf Ferscha, CEO of Eurex. “It will unite the U.S. and European trading spheres in a harmonized clearing environment.”
Following consultation with both customers and regulators, CCorp and Eurex Clearing say they will launch the Global Clearing Link on 28 March 2004. The delay to the launch will provide both clearing organizations and their respective regulators, customers and service providers an opportunity for further consultation and to address “issues of mutual interest.” CCorp and Eurex Clearing say that in the meantime they will continue discussions with their respective US and European regulators regarding the Global Clearing Link.
With the launch of Eurex US, CCorp will provide clearing services for US$-denominated products. The Global Clearing Link will then be implemented on March 28, providing additional functionality: CCorp participants will be able to carry at CCorp Euro-denominated products executed on Eurex and Eurex Clearing customers will be able to carry at Eurex Clearing USD-denominated products executed on Eurex US. From 12 September 2004, CCorp will provide clearing services to enable 20-hour trading of Euro-denominated benchmark products, featuring fully harmonized processes for cross margining between CCorp and Eurex Clearing and a single collateral pool.
“The invaluable input of our clearing participants has permitted us to develop the Global Clearing Link with Eurex Clearing AG that will result in significant cost savings to market participants worldwide,” says Dennis Dutterer, President and CEO of The Clearing Corporation. “Our collaborative efforts with the marketplace will enable us to offer these benefits in a timely fashion, coordinated with the February 1 launch of Eurex US.”
The agreement between CCorp and Eurex Clearing will have an initial term of seven years with automatic renewal for three years.
The Clearing Corporation is owned by 50 stockholders, many of them derivatives marketplace participants and market makers. It is the largest clearing organization for futures in the US and clears over 98 percent of all U.S capital market derivatives.