Newedge Joins International Derivaties Clearinghouse
March 10, 2010
Multi-asset brokerage services provider Newedge USA has finalized its membership with the International Derivatives Clearinghouse, a derivatives clearing organization regulated by the Commodity Futures Trading Commission (CFTC).
With this membership, Newedge can offer central counterparty clearing of Interest Rate Swap products (IRS). Newedge clients and their swap market makers can continue to execute interest rate swaps in the OTC market. Counterparties can then reduce counterparty risk by simultaneously novating their positions to IDCH, with Newedge as their clearing firm.
Counterparties will benefit from the clearinghouse performance guarantee and the proven segregated funds protections of the U.S. futures market, according to Newedge.
“We’ve seen considerable demand from buy-side clients and liquidity providers for the clearing service we can offer via IDCG’s structure,” said Nicolas Breteau, Newedge’s global head of sales and front office. “In addition, compared to the incumbent bi-lateral exposure model, we believe there is potential for considerable cost savings and risk reduction for market participants using central clearing through Newedge and IDCH.”
Garry N. O’Connor, CEO of IDCG added that "Newedge, with its knowledge of the marketplace and established client relationships, gives us a solid partner to continue building this business, while offering the market the transparency, normalized valuation data, and risk mitigation necessary for interest rate swaps.”
The International Derivatives Clearing Group, operator of the International Derivatives Clearinghouse, is an independently operated, majority owned subsidiary of The NASDAQ OMX Group.
