Following a successful test phase, Eurex Clearing has gone live with its clearing service for deliverable cross currency swaps and OTC FX. Commerzbank has joined J.P. Morgan and Morgan Stanley as Clearing Members to enable the completion of testing and go-live of the service.
For Eurex and its parent company, Deutsche Börse, the launch once again underscores the Group’s ambition to support the move from OTC to central clearing.
The transactions are cleared and settled on a net basis across cross currency swaps and OTC FX. This significantly reduces capital requirements under SA-CCR, the standardized approach for measuring counterparty credit risk. Eurex Clearing guarantees settlement in CLSClearedFX, which provides liquidity and funding benefits while mitigating settlement risk. CLS is the leading provider of settlement services for the global foreign exchange market.
OTC FX clearing includes FX Spot, FX Forward and FX Swap matched on 360T, Deutsche Börse’s global FX unit. The launch of non-deliverable forwards (NDF) clearing is scheduled for the second half of 2021. Eurex Clearing will then be offering clearing services for both, deliverable and non-deliverable FX products. This will provide further capital and operational efficiencies to Clearing Members, leveraging the same connectivity for both product groups.
Keith Tippell, Global Head of Product at CLS, commented:
“The addition of Eurex Clearing to CLSClearedFX, our settlement service for cleared FX and derivatives, demonstrates the benefits we can deliver to market participants by collaborating with other market infrastructures to further mitigate systemic risk.”