CME Swaps on Swapstream to be the First Centrally Cleared Interest Rate Swaps Available to All OTC Market Participants
July 17 2007 - 7:00AM
PR Newswire (US)
CHICAGO and LONDON, July 17 /PRNewswire-FirstCall/ -- CME Group,
the world's largest and most diverse derivatives exchange, today
announced plans to offer the market a cleared interest rate swap
product through its subsidiary, Swapstream, a market-leading
multilateral electronic trading platform for interest rate swaps.
The exchange plans to launch the product early in the first quarter
of 2008. CME Swaps on Swapstream will be the first interest rate
swap to offer the OTC marketplace the full benefits of central
counterparty clearing. The product will trade exclusively on
Swapstream's sPro(TM) platform and will be centrally cleared
through CME using its OTC clearing solution, CME Clearing360(TM).
CME Swaps on Swapstream combines unparalleled direct, anonymous
access to high-volume customer groups through Swapstream's
platforms, with the regulatory protection and risk management
previously only available with exchange-traded products. The
product will include forward-dated interest rate swaps denominated
in U.S. dollars and Euros with maturities out to 30 years, as well
as short-term overnight index (OIS) swaps ending on monthly
International Monetary Market (IMM) start dates. Their fixed
coupons will be reset at the end of every day and positions will be
marked to market daily. "CME Swaps on Swapstream brings the
benefits of central counterparty clearing, such as position netting
and risk offsets, to the $207 trillion interest rate swaps market,"
said Robin Ross, Managing Director, CME Group Interest Rate
Products. "Combining the strengths of CME Clearing360 services and
Swapstream's cutting edge trading technology is part of CME Group's
broader strategy of providing greater operational and cost
efficiencies to trading vanilla over-the-counter products."
"Together CME Group and Swapstream are providing a revolutionary
OTC solution that meets the needs of swaps traders and other market
participants, such as hedge funds," said Stephane Rio, CEO,
Swapstream. "For the first time users of plain vanilla and forward
swaps will have the opportunity to trade standardized,
centrally-cleared interest rate swaps on a multilateral, neutral
electronic platform." The new product will offer the balance sheet
and operational efficiencies of central counterparty clearing and
straight through processing to the interest rate swap market. In
particular, benefits of CME Swaps on Swapstream include: --
Automatic netting of offsettable positions -- Operational
simplicity through provision of the daily Swap Value Factor and use
of standard FIXML -- The use of SPAN (Standards Portfolio Analysis
of Risk), a methodology developed by CME in 1988 for calculating
performance bond requirements, provides simple and appropriate
provisioning of risk offset -- Favorable capital treatment through
marking the swaps to market daily and banking these amounts For
more information on CME Swaps on Swapstream please visit
http://www.cme.com/swaps or http://www.swapstream.com/ to learn
more about connecting to Swapstream. CME Group
(http://www.cmegroup.com/) is the world's largest and most diverse
exchange. Formed by the 2007 merger of the Chicago Mercantile
Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group
serves the risk management needs of customers around the globe. As
an international marketplace, CME Group brings buyers and sellers
together on the CME Globex electronic trading platform and on its
trading floors. CME Group offers the widest range of benchmark
products available across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, agricultural commodities, energy, and alternative
investment products such as weather and real estate. CME Group
(NYSE:CMENASDAQ:CME) is traded on the New York Stock Exchange and
NASDAQ under the symbol "CME." The Globe logo, CME, Chicago
Mercantile Exchange, CME Group, Globex and E-mini, 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.
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Standard & Poor's Depositary Receipts and SPDR are trademarks
of The McGraw-Hill Companies, Inc. NASDAQ, NASDAQ-100 and the
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The Russell 2000 Index and Russell 1000 Index are registered
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Contracts are trademarks of Merrill Lynch & Co., Inc. GSCI is a
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Dow Jones Industrial Average are trademarks of Dow Jones &
Company, Inc. CDR Liquid 50 NAIG is a trademark of Credit
Derivatives Research LLC. These trademarks are used herein under
license. All other trademarks are the property of their respective
owners. Further information about CME Group and its products can be
found at http://www.cmegroup.com/. CME-G DATASOURCE: CME Group
CONTACT: Investors, John Peschier, +1-312-930-8491, or Media,
Jeremy Hughes, +44.207.796.7112, or Pamela Plehn, +1-312-930-3446,
, all of CME Group Web site: http://www.cmegroup.com/
http://www.cmegroup.mediaroom.com/ http://www.cme.com/swaps
http://www.swapstream.com/
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