CME Group receives Bank of England’s approval to launch FX derivatives

The company aims to launch its new OTC derivatives offerings on the 3rd of March

The European division of the CME Group, CME Clearing Europe has announced today that it received regulatory approval to launch Overnight Index Swaps, zero coupon swaps, Forward Rates Agreements, basis swaps and variable notional swaps. In addition the company is now allowed to clear Nordic currencies – the Norwegian, Swedish and Danish krone. The company is allowed to launch the approved services since the 3rd of March.

The company has been struggling to get regulatory approval since September last year when it announced its intention to expand its offering across European clearing markets. The CME Group can leverage its Dodd-Frank regulatory experience on the European markets, since it is widely expected that mandated clearing of over-the-counter derivatives will be introduced within the new EMIR rules framework.

According to the CME Clearing Europe’s CEO Lee Betsill, the company is cooperating with buy and sell-side customers to provide a distinctive service to its customers and offer an appropriate solution to their risk management needs. He proceeds to detail the already existing individually segregated account for collateral protection that compliments the new fully segregated account that is still pending regulatory approval.

Credit Suisse and BlueBay Asset Management executives have praised the new offering of the company at a time when there was some speculation that CME might postpone its FX launch for energy derivative offerings. There is no mention of the required FCA approval in the company’s press release, however since the effort has been publicized we would speculate that it’s only matter of days if not hours.

For the full press release visit CME Group’s website.

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