Seven FX Market participants agree to clear CME OTC Non-Deliverable forwards


CME Group announced that seven market participants have agreed that they intend to clear OTC FX Non-Deliverable Forwards (NDFs) by the end of Q1 2018.

As more clients and liquidity providers are affected by uncleared margin rules, additional market participants clearing NDFs will provide greater access to the capital efficiencies of OTC FX Clearing for clients around the world. Emerging market currencies provide a unique opportunity to cross-margin NDFs with Non-Deliverable IRS cleared at CME, offering potential initial margin savings of up to 51 percent.

The seven market participants involved include: BBVA, Citi, Itau Unibanco, NatWest Markets, Santander, Standard Chartered and XTX Markets.

“CME is committed to delivering unparalleled capital efficiencies and we are excited to have seven market participants working to execute CME-cleared NDFs with their customers,” said Sean Tully, Senior Managing Director of Financials and OTC Products. “Our NDF clearing solution leverages the same guaranty fund as the entire CME Group-listed futures and options complex, enabling material capital savings for our NDF clearing members and lower fees for customers clearing via an FCM – as well as setting the conditions for the portfolio margining of FX futures versus NDFs.”

CME Group is the leading FX futures exchange globally with more than $91 billion average daily volume (ADV) across listed FX futures and options year to date, and more than $260 billion of open interest.

CME Clearing is also the market leader in providing a cleared solution in emerging market currencies. More than 170 market participants clear more than $20 billion ADV of MXN and BRL IRS at CME. CME Group announced the launch of Korean Won and Indian Rupee swap clearing on July 11, 2017 and has since seen 17 participants clear over $1 Billion in notional to date.