Amid all the chatter around the structure of exchange
clearinghouses, Eurex has rebranded its existing structure and
is now set to increase its marketing to the OTC market. "Eurex
clearing is the largest clearinghouse in Europe but we did not
have the corresponding market presence as a clearinghouse and
we want to promote our services as a clearinghouse to the OTC
market," says Thomas Book, member of the Eurex executive board
and responsible for clearing told FOW
The marketing campaign is accompanied by the introduction of
a new OTC trade entry facility as well as fee reductions for
OTC block trades as of July 1. As OTC volume still makes up 84%
of the total global derivatives volume, the exchange is keen to
capture a bigger share of this business.
"OTC clearing is a significant business already but we
believe there is big potential. There is a definite need for a
central counterparty especially as market conditions being what
they are now," says Book.
Eurex has introduced a Multilateral Trade Registration
facility allowing brokers to enter block trades with one buyer
or seller and multiple counterparties instead of having to
enter separate bilateral block trades.
Book says: "The new functionality will allow to enter where
one buyer or seller has multiple counterparties. This new
functionality is now completely integrated."
Fee caps for block trades have also now been put in place,
totalling a 50% reduction for German, Swiss and Scandinavian
equity options. Also, in order to stimulate proprietary
trading, fee caps on these accounts have been set even lower,
at €100 for all equity options. This will give a maximum
reduction of up to 75% depending on the underlying.
Book says that these new developments have taken months of
preparation and are not a reaction to the debate raging about
vertical clearing structures or as a response to the success of
Liffe’s B Clear functionality which continues to
attract strong volume.
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