Financial reforms like EMIR and MiFID II/MiFIR in Europe and the Dodd-Frank Act in the U.S. are fundamentally changing the way that over-the-counter (OTC) derivatives markets operate. Eurex Clearing’s EurexOTC Clear Service supports Clearing Members and their clients in complying with regulatory requirements by offering central clearing of OTC derivative transactions. The service has been designed to provide the following benefits:
- Clearing of a wide range of OTC products for both Clearing Members and their clients
- Clearing of OTC FX and Cross Currency Swaps for Clearing Members' proprietary business only
- Reduction of counterparty credit risk from cleared trades via the default guarantee provided by Eurex Clearing
- Leverage of Clearing Member’s and client’s non-cash assets by allowing a wide range of securities (as well as cash) to be accepted as collateral
- Operational efficiency via straight-through processing
- For clients, segregation of margin and portability of positions and collateral in the event of a Clearing Member default (depending on level of client segregation).
Eligible products for the service are:
- Plain vanilla (fixed/float) Interest Rate Swaps (IRS), Overnight Index Swaps (OIS), Forward Rate Agreements (FRA) and Zero Coupon Inflation Swaps (ZCIS) and Basis Swaps (float/float in the same currency).
- OTC FX and OTC Cross Currency Products
The Service supports clearing of eligible products in the currencies EUR, USD, GBP, CHF, JPY, DKK, NOK, SEK and PLN and FX/CCS products in the currency pairs EUR//USD and GBP/USD.