J.P. Morgan has become the first over the counter (OTC) clearing participant to launch an agency clearing service through the ASX for AUD and NZD denominated derivatives.
The clearing broker's Australian-domiciled clients will now be able to keep all of their AUD and NZD cleared derivatives trades in one clearing house with one legal construct.
J.P. Morgan product solutions and client relationship manager for futures and options and OTC Clearing David Stinson said: "Our investment in product development responds to the needs of our domestic institutional investor clients that can benefit from a local solution."
"Clients that are trading AUD and NZD overnight index swaps and interest rate swaps will be able to take maximum advantage of a local clearing provider open through the Australian business day, realising both the operational and risk benefits of seeing their positions updated and refreshed in a local time zone, in local currency," he said.
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"In addition, we understand that clients need solutions to optimise the performance of their cleared portfolios, minimising the amount of margin they have out to the street.
"By supporting the cross-margining facility that ASX offers across its cleared interest rate derivatives, we are extending this benefit to buy-side clients and allowing them to access funding and margin efficiencies."
J.P. Morgan recently executed the first clearing on the system.
ASX operates the largest listed interest rate derivatives market in Asia (with annual notional turnover of $53 trillion). Its dealer to dealer OTC clearing service has been in operation since 2013 and cleared $6.3 trillion in notional value last financial year.
The OTC clearing service has global standard API connectivity, 24-hour clearing, AUD and NZD product coverage, and a fully automated cross-margining facility.