CCP Volumes: The next evolution of the FX Market?

The above graph shows the Cumulative Monthly Notional Value of LCH FX Notional Values.

  • From September 1st 2016, the non-cleared margin rules have required many large banks to exchange initial margin on NDFs for the first time.
  • As a result has caused a surge in LCH FX volumes in Q4 2016.
  • From a margin perspective, NDF’s and forex options are now cheaper to trade via a clearing house than bilaterally, and greater netting is available at a CCP, hence reduced capital requirements.
  • Greater Segregation in Credit Risk and reduced exposure to counterparties.
  • Emergence of the New FX market place from:
    • G20 FX to G20 NDF and ETD
    • Bi-Lateral FX Options to Cleared FX Options
    • Bi-Lateral G4 to Centrally Cleared G4

There are now more compelling reasons to Clear FX and Sernova is positioned perfectly.

Sernova offers cloud-based clearing services, recreating the infrastructure and service elements of a traditional clearing broker, enabling regional banks to assume direct memberships of CCPs and offer client clearing for regionally significant clients.

2017-09-09T16:04:38+00:00 June 6th, 2017|Uncategorized|