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Eurex launches deliverable cross currency swaps and OTC FX clearing

Release date:
26 Jul 2021
| Eurex

Eurex launches deliverable cross currency swaps and OTC FX clearing

- First clearing house to physically settle cleared cross currency swaps in CLSClearedFX, CLS’s settlement service for cleared FX products
- Commerzbank, J.P. Morgan and Morgan Stanley already live
- Unique service for cross currency swaps and OTC FX that offers netted settlement guaranteed by Eurex Clearing

Following a successful test phase, Eurex Clearing has gone live with its clearing service for deliverable cross currency swaps and OTC FX. Commerzbank has joined J.P. Morgan and Morgan Stanley as Clearing Members to enable the completion of testing and go-live of the service. For Eurex and its parent company, Deutsche Börse, the launch once again underscores the Group’s ambition to support the move from OTC to central clearing.

The transactions are cleared and settled on a net basis across cross currency swaps and OTC FX. This significantly reduces capital requirements under SA-CCR, the standardized approach for measuring counterparty credit risk. Eurex Clearing guarantees settlement in CLSClearedFX, which provides liquidity and funding benefits while mitigating settlement risk. CLS is the leading provider of settlement services for the global foreign exchange market.

Erik Müller, CEO of Eurex Clearing: “Central clearing and guaranteed settlement for cross currency swaps in CLSClearedFX is a world first. We are pleased to have launched this together with CLS to deliver capital, liquidity and settlement benefits – providing further resilience to the market.”

OTC FX clearing includes FX Spot, FX Forward and FX Swap matched on 360T, Deutsche Börse’s global FX unit. The launch of non-deliverable forwards (NDF) clearing is scheduled for the second half of 2021. Eurex Clearing will then be offering clearing services for both, deliverable and non-deliverable FX products. This will provide further capital and operational efficiencies to Clearing Members, leveraging the same connectivity for both product groups.

Keith Tippell, Global Head of Product at CLS: “The addition of Eurex Clearing to CLSClearedFX, our settlement service for cleared FX and derivatives, demonstrates the benefits we can deliver to market participants by collaborating with other market infrastructures to further mitigate systemic risk.”

Jochen Litzinger, Divisional Head of the Interest Rates, Currencies and Commodities Trading (IRCCT) Cluster at Commerzbank AG: “Eurex Clearing has addressed significant complexity in implementing clearing and guaranteed settlement of these products, providing capital savings and operational efficiencies. It has been an important project on our side to innovate in the FX market, where we received significant support from Sernova Financial to structure our clearing workflows across different central clearing parties in the most efficient way. We are delighted to be part of this service.”

Charles Bristow, Head of Rates, Fixed Income Financing and Credit Portfolio Trading at J.P. Morgan said: “Cross currency swaps play an important role in the flow of capital through the international markets. Moving to a centrally cleared model is a significant moment for the asset class as it reduces complexity, enhances efficiency and increases market resilience.”

Marco Gregotti, COO for Macro Products at Morgan Stanley: “We support the growth of post trade services for currency swaps and FX markets and are pleased to be part of the Eurex offering.”

About Eurex

Eurex stands for the leading European derivatives exchange and – with Eurex Clearing – one of the leading central counterparties globally. Being architects of trusted markets characterized by market liquidity, efficiency and integrity, we provide our customers with innovative solutions to seamlessly manage risk.

About CLS

CLS helps clients navigate the changing FX marketplace – reducing risk and creating efficiencies. Our extensive network and deep market intelligence enable CLS specialists to lead the development of standardized solutions to real market problems. Our innovative, forward-looking products make the trading process faster, easier, safer and more cost-effective – empowering our clients’ success. Find out more: