BNY Mellon to Clear Derivatives for Nasdaq OMX Unit
July 8, 2010
BNY Mellon said it will help clear interest-rate derivatives for the International Derivatives Clearing Group.
The securities servicing firm said its BNY Mellon Clearing subsidiary will handle interest-rate derivatives transactions after it becomes a clearing member of the International Derivatives Clearinghouse, an independently-operated, majority-owned subsidiary of the Nasdaq OMX Group.
With this membership, BNY Mellon Clearing will act as a central counterparty in the clearing of interest-rate derivatives, which corporations, investors and municipal governments use to manage overall financial risk.
As central counterparty, the clearing unit will guarantee that transactions can settle, mitigating credit risk. The arrangement also allows for special bankruptcy provisions related to margining and portfolio valuation offered by IDCG through its clearinghouse.
"Our clients want a capable, stable partner that has membership in clearing organizations like IDCG to support their growing and evolving trading needs," said Sanjay Kannambadi, CEO of BNY Mellon Clearing, LLC.
The operations of the derivatives clearing organization are regulated by the U.S. Commodity Futures Trading Commission.
BNY Mellon services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day.
BNY Mellon Clearing is a US registered futures commission merchant.
BNY Mellon holds a minority interest in IDCG.
