Integration Prepares for Pending SEF Regulatory Clearing Mandate
Bloomberg executives today announced the industry's first integration between a foreign exchange (FX) trading platform and a clearinghouse for clearing of non-deliverable forwards (NDFs). The connectivity was established to prepare for the mandatory clearing of over-the-counter (OTC) derivatives traded on swap execution facilities (SEFs).
The NDF trades were electronically executed via Bloomberg's Foreign Exchange platform FXGO, available on the Bloomberg Professional service. Bloomberg clients traded over FXGO and the transactions were cleared through clearing brokers at CME Group. Bloomberg intends to register with the U.S. Commodity Futures Trading Commission (CFTC) as a SEF.
"These trades are a clear signal to our customers, especially buy-side firms, that we are ready, willing and able to help them comply with any upcoming regulations," said Tod Van Name, global head of Bloomberg's FX business. "Our strong base of NDF liquidity providers on FXGO and our voice confirmation system (VCON) means clients will have a single, seamless system for OTC derivatives trading ready whenever they need it."
Michael O'Connell, CME Clearing's Managing Director, said, "As the leading clearinghouse for straight through processing (STP) of OTC derivatives, CME’s open standard API has helped platforms such as Bloomberg send trades directly to a CCP, thereby facilitating scalable OTC-cleared trading. We look forward to developing standard trade processes and enhancing our OTC offering, especially since FX is a growing market."