NO 229 – MARCH 2012
Investing in long term growth of SMEs

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WFE Focus January 2012
Post trade

Bursa Malaysia Derivatives introduces new clearing and settlement system
On 27 February 2012, Bursa Malaysia Derivatives launched a new derivatives clearing and settlement system to provide faster and more efficient clearing and settlement services for its clearing participants. This new system will pave the way for the introduction of new derivative futures and options products.

CDCC launches fixed-income central counterparty
TMX Group’s Canadian Derivatives Clearing Corporation (CDCC) has launched its fixed-income central counterparty services and has begun to clear repurchase (repo) agreements. CDCC is the issuer, clearinghouse and guarantor of exchange traded derivatives in Canada and exclusive clearinghouse to Montreal Exchange.

Clearstream launches innovative collateral management cooperation and announces new collateral management service for Canada
Clearstream and BNP Paribas Securities Services have signed a letter of intent to intensify their cooperation on collateral management. BNP Paribas customers will be able to consolidate their collateral holdings via Clearstream’s Global Liquidity Hub, to cover their global exposures from a single optimized collateral pool. Furthermore, Canadian financial institutions are set to benefit from a new efficient and effective collateral management service planned for development by Clearstream and CDS Clearing and Depository Services. The two companies signed a letter of intent and will now move forward in exploring the creation of a new triparty collateral management service for Canada. The service would enable CDS, the Canadian central securities depository, to utilize Clearstream’s collateral management infrastructure and the Liquidity Hub GO service to allocate, optimize and substitute domestically held collateral on a fully automated basis and in real time. Liquidity Hub GO for Canada would reduce operational risks and costs as well as minimize the opportunity cost associated with collateral fragmentation.

Clearstream and Eurex Clearing to launch additional GC pooling segment
Clearstream, Eurex Repo and Eurex Clearing, all part of Deutsche Börse Group, will introduce an extension of the integrated GC Pooling market for secured funding which will be made available for active GC Pooling participants (banks) to further strengthen their service scope towards corporate customers. Launch is scheduled in the fourth quarter of 2012. The new market segment aims to support the growing need of non-financial institutions for secured funding by adding the known benefits of GC Pooling (electronic trade entry, mitigation of counterparty risk via Eurex Clearing’s central counterparty and state-of-the-art collateral management of Clearstream Banking).

CME Group develops energy risk management products for Japan
CME Group and RIM Intelligence, Japan’s foremost provider of energy price and information services, have signed an agreement to develop clearing services for OTC risk management products used by the Japanese energy industry. The products will be listed and subject to the rules of NYMEX and cleared through CME ClearPort.

Hong Kong Exchanges to implement clearing houses’ risk management reform
Following positive responses to market consultation on clearing houses’ risk management reform, Hong Kong Exchanges and Clearing plan to implement its key proposals in the third quarter of this year. The main changes include: introduce a standard margin system and a Dynamic Guarantee Fund at HKSCC; revise certain price movement assumptions in the clearing houses’ stress testing; revise the counterparty default assumptions; and revise the collateral assumptions at HKCC and the SEOCH.

ICE launches new cleared OTC contracts
IntercontinentalExchange launched 28 new cleared OTC contracts for natural gas liquids, North American natural gas, North American power, crude and refined petroleum products. All of the new contracts will be available for the trade date of 19 March 2012, subject to Energy Risk Committee approval and regulatory non-objection.

LCH.Clearnet, NYPC, DTCC and NYSE Euronext cooperate to provide clearing and margining efficiencies
The parties’ goal, defined in a Memorandum of Understanding is to deliver greater capital efficiency to market participants by combining NYSE Liffe US-traded interest rate futures contracts already cleared by NYPC, fixed-income cash and repo trades cleared by the DTCC’s Fixed Income Clearing Corporation and interest rate swaps cleared by LCH.Clearnet’s SwapClear service into a single portfolio for purposes of margin netting and offsetting. As agreed in the MOU, the parties will assess areas where operational and collateral management efficiencies can be achieved through mutually agreed service level arrangements between the organizations in the US. All parties have also committed to developing an aligned default management process to protect market participants, as well as the development of payment and settlement mechanisms for non-US dollar products. The final margining structure and agreements would be subject to the review and approval of both the US Commodity Futures Trading Commission and the US Securities and Exchange Commission. Additionally, all parties have agreed to develop a joint governance arrangement regarding the combined risk management system and will work together to secure the appropriate regulatory approvals, both in the US and abroad.

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