Moscow Exchange expands OTC derivatives clearing scope to include FX swaps, forwards

Moscow Exchange, also known as Moskovskaya Birzha MMVB-RTS PAO (MCX:MOEX), announced today that starting from February 15, 2016, the Moscow Exchange Standardised OTC Derivatives Market offers new types of centrally cleared OTC transactions, FX swaps and FX forwards.

These are in addition to already available central counterparty (CCP) cleared OTC interest swaps and CCP-cleared on-exchange FX, interest and cross-currency swaps and FX forwards.

Standardised OTC derivatives enable participants to minimize credit risks by introducing a central counterparty as a party in every trade. Bank National Clearing Centre (NCC Clearing Bank), which is a qualified CCP, acts as the central counterparty for MOEX. The central clearing also allows substantial reduction of capital costs and the application of low risk coefficients when calculating N1 and N6 statutory ratios.

OTC transactions with the CCP have a number of features, such as daily marking-to-market with deposit not variation margin payable, as well as interest paid at the RUONIA or fed funds rate on accrued deposit margin in RUB and USD, respectively. NCC Clearing Bank pays interest at RUONIA-1% on collateral in RUB for Standardised OTC Derivatives Market transactions with the CCP.

You can view the full announcement from MOEX by clicking here.

Read Also: