SIX expands currency support via BME Clearing in response to an E.U. mandate.
SIX, the financial exchanges, data, services, and systems provider, is expanding its multicurrency swaps offering via BME Clearing, a Spanish central counterparty clearing house (CCP). This is an alternative to the E.U. requirement that firms use a European CCP for the clearing of Euro-denominated interest rate swap (IRS) transactions. SIX owns BME Clearing.
The European Market Infrastructure Regulation (EMIR) 3.0 requires market participants “to open active accounts at a European CCP” for the clearing of EUR-denominated IRS trades, officials say.
SIX now supports the clearing of IRS “in six new underlying currencies to include USD, SEK, NOK, CHF, DKK and GBP,” according to the SIX announcement.
“SIX will continue to provide clearing services for EUR-denominated IRS in addition to the aforementioned currencies and may consider a further extension to scope to support additional currencies at a later date,” officials add.
SIX finds itself “ideally positioned as an attractive and cost-effective alternative for the clearing of Interest Rate swaps in the Eurozone,” says José Manuel Ortiz-Repiso, head of clearing and repo operations at SIX, in a prepared statement.
In addition to derivatives on interest rates, SIX offers clearing services for derivatives on equity index and single stocks (F&O); energy commodities (gas and power), cash instruments on repos, buy-sell backs (BSB), cash equity and fixed income, officials say. Support for crypto derivatives is coming.
In addition to IRS trades, BME Clearing provides clearing for forward rate agreements (FRAs) and overnight indexed swaps (OIS), officials say. BME Clearing is included in the list of CCPs authorized to offer services and activities in the European Union, published by the European Securities and Markets Authority (ESMA). Beyond IRS transactions, BME Clearing’s CCP services support financial derivatives, public debt repos, energy derivatives, and equities.
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