Eurex Clearing Receives CFTC Mandate as a Derivatives Clearing Organization

The US Commodity Futures Trading Commission (CFTC) has granted exchange operator, Eurex Clearing AG, official registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act (CEA), helping solidify Eurex’s centralized clearing capabilities in the US, according to a CFTC statement.

Per the new order and recognition, Eurex will be authorized to provide its suite of clearing services for swaps for US clearing members, exchanges, and market participants, conditional upon Eurex meeting several obligatory measures by the CFTC – this includes the regulator’s straight-through processing (STP) requirements.

Upon request, Eurex had also requested an additional registration measure which entails the compliance of the CFTC’s aforementioned requirements at a future date, whilst satisfying parallel European STP measures. The lag in requirements and requisite compliance has been due in large part to delays in the implementation of the European Commission’s Markets in Financial Instruments Directive II (MiFID II), which at this juncture is slated for 2017.

In addition, the CFTC has also permitted Eurex to continue its clearing mandate over proprietary positions in interest rate swaps for US clearing members – the decision follows on the heels of a previous relief, which the CFTC has provided since mid 2013. Unfortunately for Eurex, the lag in STP requirement satisfaction has thus far prevented the group from clearing FCM customer positions in the US, though this is the next logical step for the group following the adoption of its compliance regime.

Eurex made headlines yesterday after it , which saw key measures of its business in positive territory, catapulting higher MoM when measured against its December 2015 counterpart. This included double-digit growth in ADV across a YoY timeframe.

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