NASDAQ OMX Nordic Introduces Clearing Of Interest Rate Swaps

18/12/2012

NASDAQ OMX Nordic today announced the clearing of SEK denominated interest rate swaps for end client trades in the Nordic market in February 2013. This will provide the entire market with a clearing solution for standardized SEK denominated interest rate swaps. Since November 2011 clearing has been available for the trades between participating members only, while NASDAQ OMX and the Nordic member community have negotiated the legal and technical framework for a successful introduction of interest rate swaps clearing for end client trades.

“We’re confident that cleared interest rate swaps will be a strong addition to our current product suite of cleared interest rate derivatives on the Nordic market,” Jens Henriksson, Head of Nordic Fixed income, NASDAQ OMX, commented. “We currently have an average daily clearing volume in excess of USD 20 billion. The first stage to expand the product scope includes interest rate swaps, forward rate agreements and overnight index swaps denominated in SEK. The next phase is to provide the market with clearing of interest rate swaps and related derivatives denominated in DKK, NOK and EUR.”
Rules and regulations as well as the technical system were upgraded on November 26th in order to facilitate the introduction of new instruments.

In order to provide a secure clearing service, NASDAQ OMX and participating clearing members have agreed to perform an extensive exercise where a default situation is simulated, during January. Participation in regular exercises are part of the agreement that members need to enter with NASDAQ OMX before participating in and later potentially offer clearing services for clearing of interest rate swaps.

The following members have agreed to participate in the default exercise:

• Swedbank
• SEB
• Handelsbanken
• Nykredit
• Nordea
• Danske Bank
• Swedish National Debt Office

A majority of the participating members have entered a number of trades for clearing at NASDAQ OMX Clearing in Stockholm during 2012 in order to verify the system and the operational work-flow. NASDAQ OMX has also integrated with MarkitWire during 2012 in order to support the existing infrastructure for the OTC market.