CME Group said it will start offering “one-pot” margining of positions in interest-rate swaps and futures, beginning May 7.
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The operator of derivatives markets said combining margin positions could save up to 85 percent on capital requirements for collateral, in some cases.
"This new portfolio margining program will allow us to maintain our rigorous risk management standards at the same time we provide greater capital efficiencies and flexibility to those transitioning to OTC clearing,’’ said Kim Taylor, President, CME Clearing.
CME Group operates clearing houses for interest-rate swaps and credit-default swaps, with more than $415 billion in total volume cleared.
IntercontinentalExchange’s
This will allow for more efficient collateralization of opposite positions in index and correlated single-name credit default swap instruments.
ICE Clear Credit said it received approval for clearing participant portfolio margining from the Securities and Exchange Commission and that it is self-certified with the Commodity Futures Trading Commission.
Tom Steinert-Threlkeld writes for