CME Group’s plans to extend its ClearPort clearing service to a wider range of foreign exchange products will go live early next year.

Derek Sammann, global head of foreign exchange at CME Group, confirmed in mid-October that: “Our goal is to have internal readiness for ClearPort by the end of the year – and we’re well on schedule for that and external readiness in terms of clients’ technology and readiness for early in 2010.”

Sammann said the general reluctance to take on counterparty risk was the driver for the venture. “There is now a clear government mandate for clearing CDS, and although we’ve not yet reached that point in the global foreign exchange market, the case for the credit mitigation facility of a clearing house for the global FX market is now becoming compelling,” he said.

“We’ve seen in the last 12 months an increased reluctance to take on counterparty risk. And we don’t see this going away.”

CME’s plans to move into clearing OTC forex products were flagged by Craig Donohue, CME group chief executive, in late September. He also said its previous effort to expand into the OTC market – it pulled out of FXMarketSpace, a joint venture with Thomson Reuters, in October 2008 – had been too “revolutionary” for market participants.

Donohue said that customers did not want clearing and execution on the same platform, but rather just clearing, and that that is what ClearPort would provide.

(For full details see FX feature on page 37)