News review : Barclays joins the Eurex OTC clearing bandwagon

BARCLAYS JOINS THE EUREX OTC CLEARING BANDWAGON.

Barclays has become the first European bank to provide Eurex over-the-counter (OTC) clearing services to US clients. It is being offered through its US registered futures commission merchant.

This latest development demonstrates the continuing increase in US demand for Eurex’s OTC services. This year has already seen Citi become the first US-based FCM followed by two US-based Swap Execution Facilities (SEF) – Bloomberg and Tradeweb which granted US clients the ability to directly submit their executed swap transactions to the clearinghouse.

Tim Gits, Head of Fixed Income Sales Americas at Eurex said that “Barclays is a great addition to our EurexOTC Clear offering and a testament to the growing interest we are experiencing in the US. The growth we have seen from US institutions since receiving CFTC approval in late 2018 has been very encouraging, and the number of FCMs and clients in the pipeline is very promising.”

Eurex Clearing received approval from the Commodity Futures Trading Commission (CFTC) in late 2018 to offer customer swap clearing in the US in addition to the clearing services for futures already provided. In this context, it launched a legal framework that complies with the LSOC (Legally Segregated Operationally Commingled) requirements required by the regulator for the clearing of customer swap transactions.

The move represented a gesture of goodwill by the CFTC which has been at logger-heads with the European Union over proposed rules that could impede cross-border trading between the two markets.

Stephen Li, Barclays Head of ADS Americas added that the main drivers were to meet client demand. The decision “demonstrates Barclays’ commitment to provide choice and meet clients’ needs for an alternative liquidity pool in euro interest rate swap clearing.”

Barclays has been busy for the past four years reorganising its business lines including the recent rebrand of its Agency Derivatives Services business to Prime Derivative Services. This included the integration of its derivatives clearing and execution services with the prime brokerage division

©BestExecution 2019

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