J.P. Morgan has launched an agency clearing service for Australian and New Zealand dollar-denominated over-the-counter (OTC) derivatives.
The launch makes J.P. Morgan the first Australian Securities Exchange (ASX) OTC Clearing participant launch this type of clearing service.
According to J.P. Morgan, among the many advantages of the J.P. Morgan clearing solution is that Australian-domiciled clients will benefit from being able to keep all of their Australian and New Zealand cleared derivative trades in one clearinghouse.
ASX operates the largest listed interest rate derivatives market in Asia with a fully developed OTC clearing service, which provides global standard application programming interface connectivity, 24-hour clearing, Australian and New Zealand product coverage, and a fully automated cross-margining facility.
Allan McGregor, senior manager derivatives and OTC markets at ASX said: “ASX’s automated cross-margining facility is already used by banks, including J.P. Morgan, to generate margin savings through the combined risk management of highly correlated ASX futures and OTC products.”
He added: “This facility is now accessible to buy-side firms and hedge funds, which is particularly important given the global and domestic roadmap towards mandatory bilateral margining rules for non-centrally cleared OTC derivatives.”
David Stinson, futures and options and OTC clearing at J.P. Morgan, commented: “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.”
Helen Lofthouse, executive general manager derivatives and OTC markets at ASX, commented: “J.P. Morgan’s access to ASX’s OTC client clearing service demonstrates its commitment to providing the best solutions for its clients. It also shows ASX’s determination to develop services valued by the market, which includes local clearing that’s open throughout the Australian and New Zealand time zone.”
