- Would deliver valuable automation; capital and margin netting benefits; facilitates Dodd-Frank's regulatory and compliance requirements
NEW YORK, April 10, 2013 /PRNewswire/ -- trueEX, LLC, announced today that it plans to launch a service to provide termination, compaction, re-balancing and back-loading services to CME clearing clients.
Pending CFTC review, trueEX, the first CFTC-regulated Designated Contract Market (DCM) for interest-rate swaps, would provide CME clearing clients with access to trueEX's proprietary PTC (Portfolio Terminations and Compactions) platform.
"We are pleased to offer trueEX services to our clients as part of our ongoing efforts to provide the most efficient OTC clearing solution," said Kim Taylor, President, CME Clearing. "Our clients tell us that they need to actively manage their cleared portfolios by reducing line items and maintaining the most capital efficient state of their aggregate risk across cleared and bilateral swaps. This service is one way we can help them achieve that objective."
Sunil Hirani, CEO and founder of trueEX, added: "trueEX's PTC platform would be the first and only platform to provide clients the ability to directly and instantly facilitate automated terminations, compactions, re-balancing and back-loading of legacy bilateral trades into CME's clearinghouse, and also to help clients efficiently manage their portfolio of cleared swaps."
PTC was designed with significant input from both buy-side and dealer participants to help the interest rate swap community cope with regulatory and compliance requirements of Dodd-Frank. trueEX's PTC platform would be the first automated platform to allow the buy-side instant and direct access to perform key life-cycle processes on pre-existing swaps in the CME Clearinghouse: terminations, compactions, re-balancing and back-loading.
"The current process can take hours to execute, is manual, prone to operational risk and cumbersome. It can now be facilitated on the PTC platform in a manner of minutes," said Hirani. "PTC would save both buy-side and dealers significant time, facilitate margin and capital efficiencies, and reduce operational cost and risk in the pre-trade and post-trade process."
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services across asset classes for exchange-traded contracts and over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk.
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New York-based trueEX LLC operates the first swaps exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM). The trueEX DCM was designed from the ground up as the first Dodd-Frank compliant swaps exchange. The Company will initially trade interest rate swaps, will add other liquid derivatives to its portfolio and is the first to provide back loading, termination, rebalancing and compaction services for the IRS (interest rate swaps) market.
trueEX was founded by its CEO, Sunil Hirani who also founded Creditex, the first electronic trading platform for credit default swaps (CDS). In 2008, Mr. Hirani sold Creditex to Intercontinental Exchange, where he subsequently led the initiative to acquire The Clearing Corporation (TCC) which allowed ICE to clear credit derivatives globally. Mr. Hirani and members of the trueEX management team also launched T-Zero (now ICE Link) and led the initiative to create Credit Event Fixings and Delta Neutral Auctions (DNA). For further information www.trueEX.com.