18 April 2016
Chicago
Reporter: Drew Nicol

CME Group clears first interest rate swaptions


CME Group saw its first interest rate swaptions cleared last week, with Barclays, BNP Paribas, Citi and RBS among the first approved to clear the trades.

US-dollar denominated swaptions clearing offers a maximum two-year option expiry and a maximum underlying swap tenor of 30 years.

Five clearing members are approved to clear swaptions, including Barclays, BNP Paribas, Citi and RBS. Others are poised to be approved as clearing members soon, according to CME Group.

"This groundbreaking solution is designed to help transform the interest rate swaps landscape for CME Group's customers by offering greater capital efficiencies and helping mitigate counterparty risk," said Sunil Cutinho, president of CME Clearing.

Sabri El Jailani, global head of rates options trading at Barclays, added: "Clearing through CME will allow both Barclays as well as our clients to significantly improve the capital consumption and risk management of our swaptions portfolios."

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