Newedge has been granted permission to clear OTC interest rate swaps (IRS) by the Chicago Mercantile Exchange (CME).
The firm says that makes it the first futures commission merchant (FCM) and non-traditional OTC IRS swap dealer to offer central counterparty clearing of OTC interest rate derivatives.
Newedges IRS clearing platform is available to clients of Societe Generale Corporate & Investment Banking and Crdit Agricole Corporate and Investment Bank (CACIB).
Change inevitably breeds opportunity,” says Newedge CEO Nicolas Breteau. “The developing regulatory agenda has created the opening for Newedge to bring our world-class listed derivatives and OTC commodity swaps clearing expertise to the OTC IRS space. Membership of the CME is another important step forward towards fully realizing this opportunity.
As the $441 trillion IRS market shifts from a bilateral to centrally cleared model due to Dodd-Frank and the European Markets Infrastructure Regulations, the regulatory changes have created a market for providers of clearing services.
We are pleased to welcome Newedge as an OTC IRS clearing member of CME, says Kim Taylor, president of CME Clearing. We strive to offer market participants a diverse pool of clearing membership, and we are focused on continuing to work with both the buy and sell-sides to provide capital and operational efficiencies to all market participants as they transition to central clearing.
(CG)