CME Clearing Europe collateral types to include gold bullion
20 August 2012 London
Image: Shutterstock
London-based clearing house CME Clearing Europe, a wholly owned subsidiary of CME Group, has begun to accept gold bullion as an eligible form of collateral.
The newly approved payment form comes at a time when “high quality collateral is at a premium and the clearing of over-the-counter (OTC) derivatives is increasing,” said the CME Group.
Andrew Lamb, CEO of CME Clearing Europe, recently said in a statement: “We recognise there will be a massive demand for collateral as a result of the clearing mandate. This is part of our attempt to maintain the risk management standard and to offer greater flexibility to clearing members and end clients.”
Following in the footsteps of CME Clearing, which has accepted gold as collateral since late 2009, CME Clearing Europe said that the additional flexibility provided will cover margin requirements.
CME Clearing Europe currently clears OTC commodity derivatives and plans to introduce OTC interest rate swap clearing once it receives regulatory approval.
The new service to be launched later this year is set to “offer clearing for interest rate swaps (IRS), with systems and processes developed in close collaboration with swap dealers, clearing firms and buy-side users” said CME Clearing Europe.
As well as IRS, CME Clearing Europe is also planning to add to its range of financial derivative products that are available for clearing with new services for credit default swaps and foreign exchange.
The newly approved payment form comes at a time when “high quality collateral is at a premium and the clearing of over-the-counter (OTC) derivatives is increasing,” said the CME Group.
Andrew Lamb, CEO of CME Clearing Europe, recently said in a statement: “We recognise there will be a massive demand for collateral as a result of the clearing mandate. This is part of our attempt to maintain the risk management standard and to offer greater flexibility to clearing members and end clients.”
Following in the footsteps of CME Clearing, which has accepted gold as collateral since late 2009, CME Clearing Europe said that the additional flexibility provided will cover margin requirements.
CME Clearing Europe currently clears OTC commodity derivatives and plans to introduce OTC interest rate swap clearing once it receives regulatory approval.
The new service to be launched later this year is set to “offer clearing for interest rate swaps (IRS), with systems and processes developed in close collaboration with swap dealers, clearing firms and buy-side users” said CME Clearing Europe.
As well as IRS, CME Clearing Europe is also planning to add to its range of financial derivative products that are available for clearing with new services for credit default swaps and foreign exchange.
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