CME – Finadium

CCP, Derivatives, Total Return Futures, Total Return Swaps

CCPs, CME, Eurex, Euronext, securities finance, topstory, Total Return Futures, Total Return Swaps

The markets are starting to talk more about Total Return Futures (TRF) as a realistic alternative to Total Return Swaps (TRS), which themselves are competition for securities finance products. TRFs…

Competition in collateral trading notes, structured products and collateral packaged substitutes (Premium)

April 16, 2018

CCP, Collateral Management, Investments, Securitization

CCPs, CME, collateral trading notes, GCSA Capital, Invesco, K-Notes, structured products, topstory

We’re catching up on a few things following the conclusion of our Finadium Investors in Securities Lending Conference last week in New York. One notable item was a press release…

CME acquires NEX in $5.4 billion deal

March 29, 2018

Anna Reitman

CME, NEX, Repo Clearing

CME and NEX Group announced an agreement in which CME Group will acquire NEX in a transaction valued at some $5.4 billion. (£10 per share, consisting of 500 pence in cash…

More firms get serious about real-time exposure management for collateral (Premium)

December 21, 2017

Basel III, Central Counterparties, Collateral Management, Technology

Baton, Citi, CME, collateral management, exposure management, Pirum, topstory

News and Notes, News and Notes – Fintech

A press release from Baton Systems last week echoes what Pirum has been saying for a while: there is a significant amount of cash to be saved in real-time exposure…

Citi and CME Group adopt DLT for margin cost cutting

December 17, 2017

Anna Reitman

Baton, Citi, CME, DLT

Citi and CME Clearing have implemented a real-time distributed ledger platform developed by Baton Systems, a payments technology provider. The solution allows a bank to view the collateral in its…

CME Group to launch bitcoin futures in Q4

November 1, 2017

Anna Reitman

News and Notes – Fintech

bitcoin futures, CME

CME is launching bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods. The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which…

Our analysis of the CME decision to launch derivatives on US Treasury repo rates (Premium)

July 31, 2017

Interest rates, LIBOR, Repo, Repo Futures, Repo Indices

ARRC, CME, LIBOR, Repo, Repo Indices, topstory, US Treasuries

The CME announced last week that it would be creating derivatives based on the new US Treasury repo index rate that could one day replace LIBOR. This is a good…

CME Group to develop derivatives on broad Treasuries repo financing rate

July 26, 2017

CME, futures, indices, Repo

CHICAGO, July 26, 2017 /PRNewswire/ — Following the Alternative Reference Rate Committee‘s (ARRC) recent recommendation that the broad Treasuries repo financing rate should serve as the reference rate in certain new U.S. dollar…

Reuters: CME Group sees Chinese hedge funds, state-owned firms driving Asia growth

February 23, 2017

China, CME, hedge funds

Feb 21 China’s 2015 market crash sparked a surge in Asian trading for futures exchange giant CME Group as Chinese funds hedged their risk offshore and growth prospects remain strong,…

How far can swap futures go?

November 7, 2016

Deliverable Swap Futures, Derivatives, Investments

CME, deliverable swap futures, Eris Exchange, swap futures, topstory

Central Counterparties, Collateral Management, Europe

The news from Eris Exchange about swap futures remains positive, and why wouldn’t it? From a risk margin perspective, cleared swap futures make more financial sense than cleared OTC derivatives.…

Europe's buy-side responds to Eurex's ISA Direct Clearing model

October 26, 2016

Paul Amery

buy-side, CME, Direct Clearing, Eurex, ISA Direct, topstory

New membership models for buy-side participants at central derivatives counterparties (CCPs) may help alleviate recent capacity and cost constraints. However, the buy-side still faces an existential choice about its future…

Finadium: Analysis of Eurex and CME Buy-side Direct Clearing Models

October 13, 2016

Central Counterparties, Credit Exposure, Derivatives, Investments

buy-side, Clearing, CME, Eurex, topstory

This Finadium report presents the direct clearing plans of Eurex’s ISA Direct and the CME’s Direct Funding Participant model. We look at who wins and who loses, impacts on the…

CME proposes its own Direct Clearing program for the buy-side (Premium)

August 15, 2016

CCP, CFTC, US

CCP, CME, Direct Funding Participant, Eurex, topstory

The CME recently proposed a new direct clearing program for the buy-side. This expected move has the potential to create a momentous change in how futures and cleared swaps are…

CME and CloudMargin collaborate on collateral management service for cleared and non-cleared margin

June 9, 2016

CME Group and CloudMargin announce collaboration to offer CME Clearing and CME Clearing Europe customers the first cloud-based software service that integrates and automates the management of collateral in one…

Financing tools for synthetic prime brokerage in derivatives and physical markets

April 18, 2016

Salim Nemouchi

CCP, Delta One, Derivatives, Featured, Prime Brokerage

BTIC, CME, Delta One, Prime Brokerage, Societe Generale, synthetic financing, topstory

Delta One and synthetic financing businesses continue to command attention at prime brokerage firms, the result of a complex web of regulations and client needs that direct business to these…

CME opening account at the Federal Reserve Bank of Chicago

April 13, 2016

CME recently received notice that the Board of Governors of the Federal Reserve System authorized the Federal Reserve Bank of Chicago (the “Chicago Fed”) to establish and maintain a Reserve…

CME keeps collateral haircuts steady

October 6, 2015

CME

A link to the CME’s most recent collateral haircut advisory is here.

CME gets ready to add swaptions to central clearing. Not everyone is happy.

May 5, 2015

Basel III, CCP, Central Counterparties, CFTC, Cleared Interest Rate Swaps, Derivatives, Dodd-Frank, Featured

CME, LCH.Clearnet Swapsclear, swaptions, topstory

An April 23, 2015 article in IFR “Swaptions clearing raises CCP risk fears” by Helen Bartholomew continues a debate on what derivatives are appropriate for central clearing and which may…

Repo clearing is coming for HQLA. Should we declare victory and go home? Not really.

An April 16th article in Bloomberg, “Safest U.S. Debt Likely Only Collateral Covered in Repo Clearing” by Liz McCormick confirms what we already suspected: central clearing of repos will not…

Part I: What’s to come for Chinese Securities Finance in 2015 (Premium Content)

January 15, 2015

Christopher Sappo

CCP, China, Collateral Management, OTC Derivatives Clearing

China, CME, OTC derivatives, securities finance, Securities Lending, Shanghai Clearing House, topstory

China’s securities markets are beginning to open; any recent scan of the news can show the link between the Shanghai Stock Exchange and the Hong Kong Stock Exchange, a new…

BNY Mellon and CME set to introduce tri-party indices and futures. Is this the right time?

November 25, 2014

Featured, Primary Dealers, Repo, Repo Futures, Short Term Interest Rate Benchmarks, Tri-Party Repo

BNY Mellon, CME, DTCC, GCF Repo, ICE, topstory

Bank of New York Mellon and the CME have announced a collaboration to produce indices based on tri-party repo and futures contracts on those indices. This was long expected but…

WSJ: FICC, CME and LCH.Clearnet all looking at repo CCPs

October 10, 2014

CME, FICC, LCH.Clearnet, WSJ

The Fixed Income Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corp., as soon as next month plans to ask the Federal Reserve and the Securities and Exchange…

CME: portfolio margining available for Deliverable Swap Futures

September 22, 2014

Portfolio Margining-eligible firms will have the ability to portfolio margin USD Deliverable Swap Futures and Ultra U.S. Treasury Bond Futures with OTC Interest Rate Swaps (IRS). Below is the list…

Shanghai Clearing House and CME sign MOU for new product development

September 5, 2014

CME, Shanghai Clearing House

Shanghai Clearing House Chairman Xu Zhen said: “Through this cooperation, we hope toleverage CME Group’s international experience in financial innovation and global markets tofurther enhance our central counterparty clearing mechanisms and financial productsinnovation, and continue to expand the influence of Shanghai Clearing House in the globalfinancial markets.”

What fees do CCPs charge clearing members on cash & collateral held? We have the answers for ICE

February 13, 2014

Cash management, CCP, Collateral Management, Derivatives, Featured, Federal Reserve, Liquidity Management, OTC Derivatives Clearing

CME, DTC, FICC, Financial Market Utilities, FMU, ICE, ICE Clear US, ICUS, NSC, OCC

So what are CCPs charging to hold collateral? For ICE Clear U.S., the answer on cash is 6bp plus a cut to ICE and 5bp on US Treasury balances.Continue reading

The CFTC and liquidity rules for DCOs: do they need committed repo facilities for their US Treasuries?

October 16, 2013

Basel III, CCP, CFTC, Collateral Management, Derivatives, Federal Reserve, Liquidity Management, Regulatory, Repo, Systemic Risk

CME, CPSS-IOSCO, LCR

There is a battle brewing between the CFTC and DCOs over collateral liquidity. And its impact on repo will potentially be enormous. Continue reading

Deliverable Swap Futures: are they living up to the hope and the hype?

July 29, 2013

Cleared Interest Rate Swaps, Deliverable Swap Futures, Derivatives, OTC Derivatives Clearing

CME, LCH.Clearnet

2

So how are the CME Deliverable Swap Futures (DSF) doing? Are they living up to the hope (hype?) that as a margin-friendly alternative to cleared swaps they would take the…

Updated data on CCP collateral holdings (Finadium subscribers only)

July 23, 2013

CCP, Collateral Management, OTC Derivatives Clearing

CCPs, CME, collateral, LCH.Clearnet, NASDAQ OMX, OCC

Finadium has updated our data on collateral holdings at CCPs worldwide, but there is a clear lag between CCP reporting on collateral vs. reporting on cleared OTC derivatives by notional…

Cross-margining and collateral savings for cleared derivatives: will the savings really be there?

June 20, 2013

CCP, Collateral Management, Derivatives, Featured, Investments, OTC Derivatives Clearing

CCP, CME, collateral management, Finadium

Part of the marketing pitch from derivatives clearing houses is about the benefits of cross-margining. The broader the product mix that is included in a netting pool, the more advantages…

The CME's Paulhac on cross margining of futures and cleared swaps: big savings but complicated

May 15, 2013

Basel III, CCP, Collateral Management, Dodd-Frank, OTC Derivatives Clearing, Prime Brokerage, Regulatory

Basel III, CCP, CME, CME Group, collateral management, OTC derivatives

An interview on MarketsWikiReform.com with Laurent Paulhac, Senior Managing Director, Financial and OTC Products & Services at the CME on collateral cross margining caught our eye. It helps clarify how…

DTCC clashes with CME on CFTC data repository rules

December 3, 2012

CCP, OTC Derivatives Clearing, Regulatory

CFTC, CME, DTCC, Trade repositories

In what is looming as a battle of two institutional powerhouses, the DTCC has objected to the CME’s proposal that all participants of their clearing services use the CME’s own…

Collateral Transformation Trades for CCPs: Banks say "Sorry, we can't help you"

An article in Futures and Option World entitled “OTC Clearing IV: How to ease the collateral squeeze” (May 21, 2012) caught our eye. Most of it is the usual stuff on the…

LCH.Clearnet to buy International Derivatives Clearing Group, putting another piece in the clearing puzzle

April 26, 2012

Collateral Management, Derivatives, Featured, OTC Derivatives Clearing, Repo

CME, FICC, International Derivatives Clearing Group, LCH.Clearnet, New York Portfolio Clearing, NYSE Liffe

LCH.Clearnet has announced they are negotiating to buy the International Derivatives Clearing Group (IDCG) from Nasdaq OMX in an all stock deal. The clearinghouses have signed a non-binding agreement, but…

The CME is now accepting corporate bonds as collateral for OTC derivatives…we have some questions

April 18, 2012

Collateral Management, Derivatives, Featured, OTC Derivatives Clearing, Regulatory, Tri-Party Repo, Wrong Way Risk

CCP, CME, collateral management, Dodd-Frank, OTC derivatives, Regulatory, tri-party repo

As of April 13, 2012 the CME has started accepting corporate bonds as collateral for cleared OTC Interest Rate Swaps. We have been thinking about the CME criteria for accepting…

The wickedly slippery slope of new collateral acceptance

April 11, 2012

CCP, Collateral Management, Derivatives, OTC Derivatives Clearing, Regulatory

BNY Mellon, CME, collateral management, Corporate Bonds, FCMs, OTC derivatives clearing

BNY Mellon lowered the practical, operational boom today on a new round of collateral acceptance for Futures Commissions Merchants (FCMs) on the CME. The CME had announced the acceptance of…

The battle of the clearinghouses is on: LCH.Clearnet versus the CME

March 19, 2012

CCP, Collateral Management, Derivatives, Featured, OTC Derivatives Clearing, Regulatory, Repo

Basel III, CCP, Clearing, CME, collateral management, Dodd-Frank, LCH.Clearnet, OTC derivatives, Regulations, Repo