Eurex and Board of Trade Clearing Corporation to Create Global Clearing Solution Partners sign letter of intent
Arrangement to give clearing members choice of clearing for both U.S. and Euro products
The Clearing Corporation to act as clearing house for Eurex's new U.S. exchange
Eurex, the world's largest derivatives exchange and highest volume derivatives clearing organization, and the Board of Trade Clearing Corporation (the Clearing Corporation), the largest independent futures clearing organization in the U.S., today announced that they intend to enter into a long term clearing partnership to create a global clearing solution. This solution will mark a major progression in the global derivatives industry, creating substantial benefits for customers worldwide. The two partners have signed a letter of intent and will now negotiate a definitive agreement.
The international initiative will give customers of the Clearing Corporation choice and direct access to Eurex benchmark products while Eurex customers worldwide will be able to clear Eurex U.S. products, as introduced, via both Eurex Clearing AG as well as The Clearing Corporation. Eurex products and future U.S. products will benefit from cross listings in the U.S. and in Europe, as well as full fungibility. Customers will have access to additional product ranges at no additional infrastructure cost on a global basis. At the same time they will benefit from lower margin requirements, cross margining and reduced collateral requirements through the use of collateral pools for a wider range of products. For the first time customers will be able to leverage their existing infrastructure to access U.S. Dollar- and Euro- denominated products and to substantially increase the efficiency of capital employed.
The Clearing Corporation is to act as the clearing organization for Eurex's new U.S. futures exchange scheduled for launch in early 2004. The new U.S. exchange together with the clearing link and Eurex will allow for 24 hour electronic trading in global benchmark products with clearing options in both time zones.
The arrangement will be non-exclusive and permits The Clearing Corporation to continue its business arrangements with other exchanges and derivatives marketplaces.
"This extraordinary global link with our European colleagues will provide tremendous value and opportunity for our clearing members and their customers," said Michael Dawley, Chairman of the Board of Governors of the Clearing Corporation. "Our agreement will insure that Chicago continues to play a major role in the growth of global derivatives trading."
Eurex CEO Rudolf Ferscha said: "Eurex will be the highest value added service provider in the U.S. derivatives market. Through the global clearing solution we will offer our customers great choice of the best clearing solutions in the U.S. and Europe. For our new U.S. products we will use the a/c/e platform, on which already 80 percent of all U.S. bond futures are traded. Our customers will be able to continue to use exactly the same infrastructure they are using now.
This partnership with the Clearing Corporation will accelerate growth throughout the industry." "The Clearing Corporation has a long history as the leader in clearing technology while maintaining the most cost-effective clearing services for its members," said Dennis A. Dutterer, President and CEO of the Clearing Corporation. "We are confident that our deal with Eurex will continue that tradition."