CME Clearing Europe has been approved as a Recognised Clearing House (RCH) by the Financial Services Authority (FSA) of the United Kingdom.
Barclays Bank plc and J.P. Morgan will act as the first settlement banks for CME Clearing Europe and will be a central part of its payment infrastructure, according to a CME statement. J.P. Morgan also will provide custody and liquidity services.
Receiving RCH status from the FSA means we can now fully focus on the launch of CME Clearing Europe, early in 2011, says Andrew Lamb, CEO of CME Clearing Europe. Through this new London-based subsidiary, we will provide locally relevant clearing services to meet the needs of our European customers, a key CME Group market. Our London team will continue their work to ensure potential clearing members and customers are ready for our launch.
According to CME Clearing Europe, its initial focus will be on introducing OTC commodity products, with clearing solutions for OTC financial products coming soon after launch. The intention is to offer multi-asset OTC clearing, and to build on the parent companys European presence to further extend the geographical reach of CME clearing services.
We are delighted to have been appointed as a settlement bank to CME Clearing Europe and support their efforts to provide safety and security through their central counterparty clearing model, says Andy Reid, head of non-bank financial institutions at Barclays Corporate. As the market looks for ways to meet the new regulatory requirements and manage portfolios, we look forward to working with the CME Clearing Europe team in providing their clearing members with excellence in operational banking services.
Separately, CME Clearing Europe has applied to the Commodity Futures Trading Commission (CFTC) to become a registered Derivatives Clearing Organization (DCO).
Paul Wilson, international head of client management and sales for financing and markets products at J.P. Morgan, says: J.P. Morgan is very pleased to provide an integrated settlement banking, custody and cash liquidity solution to CME Clearing Europe and its member firms as part of our longstanding commitment to supporting European and global exchanges and clearing houses. J.P. Morgans integrated service allows us to offer CME Clearing Europe and its member firms a single, integrated solution across cash and securities collateral management and custody.