SwapClear Q&A | More Information on the Cross Margin Announcement

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Our intrepid reporter explored the background to the recent SwapClear announcement and received a little more information:

  1. Which upstream exchange platforms does SwapClear expect to take trades from to become part of this cross-margin service?
    • We are in discussions with a number of venues regarding the new service. Nasdaq NLX and LSEG have both signed heads of terms agreements
  2. Why announce this 12 months in advance?
    • We are in discussions with regulators to formalise approval for the service. We believe that this initiative will deliver significant benefits for members and their clients. It’s important that these are understood and the market has time to prepare. We’ll keep the market updated on further timings
  3. If the upstream feed is ‘open access’ - does SwapClear expect to that CME, ICE or Eurex will connect their appropriate exchange platforms to this new service?
    • We’re in discussions with a number of venues regarding the new service which would be open to regulated venues that list suitable interest rate derivatives. It’s too early for us to discuss expectations of those specific exchange platforms although Nasdaq NLX and LSEG have both signed heads of terms agreements.

The partnership with NLX isn't a surprise to our reporter, as it aligns the interests of both firms to bring together exchange traded and OTC positions, in one clearing service. LSEG also have their own Derivatives Exchange platform from which positions could flow.

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