In other FinTech news, SIFMA is helping firms comply with MSRB Rule G-42, and Broadridge takes on derivatives clearing.
LCH Spider to Help with OTC and Listed Derivatives
Clearinghouse LCH has launched its “LCH Spider” service, described as a portfolio margining tool for over-the-counter (OTC) and listed interest rate derivatives, for members and clients using LCH’s SwapClear and Listed Rates offerings, officials say.
“LCH Spider is a fully automated service that analyses member and client portfolios and selects which eligible trades correlate and provide risk reduction,” according to the LCH. “If a member has opted in, the listed rates are then transferred to their OTC portfolio for offsetting and delivering risk and collateral efficiencies.”
The initial portfolio margining will be available for Sterling and Euro-denominated short term interest rate futures (STIRs), officials say. There are plans to add more eligible contracts, “in line with customer demand and LCH’s risk management framework,” officials add.
LCH Spider is available on an “open access” basis, to any trading venue, that is connected to LCH and which lists suitably correlated interest rate derivatives, according to LCH officials. In addition, LCH “has worked with Nasdaq NLX to include its eligible futures contracts as part of LCH Spider’s launch.”
LCH is also slated to introduce CurveGlobal contracts, following the platform’s planned launch in the third quarter of this year. “The implementation of MiFID II will further drive the possibility of greater risk offsets. Members and clients looking to calculate the potential benefits of using LCH Spider on their portfolios can simulate this using SMART Spider, a new extension of LCH’s margin simulation tool,” officials add.
“LCH Spider has the potential to be a game changer for the rates market,” says Daniel Maguire, global head of rates and FX derivatives at LCH, in a prepared statement.
LCH is majority owned by London Stock Exchange Group.
SIFMA Offers Help for MSRB Rule G-42
Officials at the securities industry association SIFMA have announced that they are developing a suite of model documents designed to help municipal advisors comply with “new MSRB Rule G-42, on duties of non-solicitor municipal advisors,” according to SIFMA. The rule is slated to be implemented on June 23.
“SIFMA is issuing the documents as exposure drafts, and is open to industry feedback through the end of this month, at which time they will be finalized,” SIFMA officials say.
SIFMA is providing municipal advisors with compliance tools “as the G-42 implementation date draws near,” says Leslie Norwood, managing director, associate general counsel and co-head of SIFMA’s Municipal Securities Division, in a prepared statement.
“We have worked with our members and counsel to develop these drafts, and we welcome additional industry input as we finalize them, with the ultimate goal of aiding firms in their compliance with the new rule,” Norwood says. “We feel that the development and use of standardized model documentation plays a critical role in increasing legal certainty and decreasing legal costs and regulatory risk for firms in this business.”
The documents in the suite include forms for:
- the Municipal Advisor Engagement Letter;
- the Disclosure Statement of Municipal Advisor;
- the Disclosure Letter for Existing Municipal Advisor Agreement;
- and the Municipal Advisory Client Worksheet
The exposure drafts are available on SIFMA’s website at the following link: www.sifma.org/g42compliancetools
Broadridge Adds Derivatives Clearing to GPTM Suite
Post-trade services and systems Broadridge Financial Solutions has broadened its Global Post Trade Management (GPTM) solution by adding exchange-traded derivatives functions via its acquisition of Dojima LLC, Broadridge officials say.
“Through this acquisition, Broadridge Global Post Trade Management will facilitate central clearing for exchange-traded derivatives, which encompasses connectivity to global clearing houses and exchanges through its global, multi-asset class post-trade solution,” according to Broadridge, which is not disclosing what it paid to purchase Dojima.
The Dojima solution will be rebranded as Broadridge Derivatives Clearing, and as a component of GPTM, will be presented as a “multi-asset multi-tenant clearing and connectivity platform for exchange-traded and cleared OTC derivatives,” vendor officials say.
The “real-time, rules driven, auto-clearing facilities” are intended to help trades flow from “global clearing houses to clearing members through to end-clients within seconds,” says Broadridge. In sum, the Dojima acquisition adds to Broadridge’s recent strategic alliance with The Technancial Company “to provide margin calculation capabilities” and thus enables Broadridge to offer “a best-of-breed clearing solution for exchange-traded derivatives,” officials add.
The Broadridge Global Post Trade Management offering can be deployed as a technology platform or fully outsourced managed service, officials say.
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