CHICAGO, Feb. 14, 2011 /PRNewswire/ -- CME Group, the
world's leading and most diverse derivatives marketplace, today
announced it has executed a non-binding term sheet with a group of
10 global swap dealers, who will serve as founding members in
support of CME Group's clearing service for over-the-counter (OTC)
interest rate swaps. The founding members are BofA Merrill
Lynch, Barclays Capital, Citi, Credit Suisse, Deutsche Bank
Securities Inc., Goldman Sachs, J.P. Morgan, Morgan Stanley,
Nomura, and UBS.
The service was launched on October 18,
2010, has cleared just under $1
billion in gross notional value to date, and has 12 clearing
members (including the 10 founding members). Additionally,
the service is supported by a client advisory board comprised of
several buy-side market participants, including BlackRock, Citadel,
Fannie Mae, Freddie Mac, and PIMCO.
"Thanks to the collaboration and commitment of our founding
clearing members and client advisory board members over several
months, we have designed a world-class, open access and truly
competitive clearing solution for interest rate swaps," said
Terry Duffy, CME Group Executive
Chairman. "These groups have helped us bring to market a
clearing solution for interest rate swaps that will meet the needs
of all qualified market participants. The non-binding term
sheet entered into today provides additional momentum and further
demonstrates dealers' commitment to support our solution and reduce
systemic risk in the market."
"Our interest rate swap clearing solution provides global
customers with a world-class risk management tool," said
Craig Donohue, CME Group Chief
Executive Officer. "Working with a leading group of swaps
dealers and customers, we have developed a solution that provides
counterparty risk reduction and transparency of CME Clearing while
preserving the prevailing execution processes, technology
platforms, and economic structures used in the bilateral IRS market
today."
CME Group's cleared OTC interest rate swaps is an open access
solution that provides market participants with the flexibility of
the OTC market without having to change their execution processes.
The service builds on the strength of CME Group's market
leading interest rate products business as well as the risk
management and legal safeguards of CME Clearing, with an
anticipated goal of offering capital efficiencies through cross
margining OTC products with benchmark futures.
For additional information, visit: www.cmegroup.com/irs.
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, energy, agricultural commodities, metals, weather
and real estate. CME Group brings buyers and sellers
together through its CME Globex® electronic trading platform and
its trading facilities in New York
and Chicago. CME Group also operates CME Clearing, one of the
largest central counterparty clearing services in the world, which
provides clearing and settlement services for exchange-traded
contracts, as well as for over-the-counter derivatives transactions
through CME ClearPort®. These products and services
ensure that businesses everywhere can substantially mitigate
counterparty credit risk in both listed and over-the-counter
derivatives markets.
The Globe logo, CME, Chicago Mercantile Exchange, CME Group,
Globex, E-mini and CME ClearPort are trademarks of Chicago
Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the
Board of Trade of the City of Chicago. NYMEX and New York
Mercantile Exchange are trademarks of New York Mercantile Exchange,
Inc. COMEX is a trademark of Commodity Exchange, Inc.
All other trademarks are the property of their respective
owners. Further information about CME Group (Nasdaq: CME) and
its products can be found at www.cmegroup.com.
CME-G
SOURCE CME Group