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Exchanges & Clearing

ICE Appoints Singapore Chair The Intercontinental Exchange (ICE) has announced the appointment of Lee Yi Shyan as chairman of ICE Futures Singapore (IFS) and ICE Clear Singapore (ICS) effective November 24 2016. Lee is a Member of Parliament in Singapore and previously served in the Singapore government over a 10 year period as a senior minister of state in the Ministry of Trade and Industry, the Ministry of National Development and the Ministry of Manpower. Prior to this, between 2001 and 2006, he served as the CEO of International Enterprise Board, an organisation promoting international trade with businesses in Singapore. Lee joined the boards of IFS and ICS on November 7.
ESMA Seeks Delay for Clearing Extension The European Securities and Markets Authority (ESMA) has asked the European Commission to delay the extension of mandated clearing to smaller counterparties. Due to a range of reasons, but in particular the fact that the relevant EU legislations are under review or still being finalised, ESMA says it proposes to postpone the phase-in period for central clearing of OTC derivatives applicable to financial counterparties with a limited volume of derivatives activity. ESMA’s report proposes to amend EMIR’s Delegated Regulations on the clearing obligation in order to prolong, by two years, the phase-in for financial counterparties with a limited volume of derivatives activity – those ones classified in Category Three under EMIR Delegated Regulations.
Clearinghouses Pass CFTC Stress Test The five clearinghouses under US jurisdiction have passed the Commodity Futures Trading Commission’s (CFTC) first stress test. The purpose of the test was to assess the impact of a hypothetical set of what the CFTC says is an extreme but plausible market scenarios across multiple clearinghouses and their clearing members. The analysis included five clearinghouses registered with the CFTC located in the US as well as in the UK, they are CME Clearing, ICE Clear Credit, ICE Clear Europe, ICE Clear US, and LCH Clearnet. It encompassed cleared futures and options, interest rate swaps, and credit default swaps. The analysis included the largest clearing members (measured by margin deposited) at each clearinghouse.
BIS Data Highlight Impact of Clearing on Interest Rate Market The Bank for International Settlements (BIS) has released its latest semi-annual survey of OTC derivative markets which highlights the growing impact of central clearing on interest rate derivative markets. The publication presents the combined results of two complementary BIS surveys on positions in OTC derivatives markets: the semi-annual survey of derivatives dealers in 13 jurisdictions, and the Triennial Central Bank Survey of dealers in an additional 33 jurisdictions. The surveys took place at end-June 2016. A companion survey on turnover in foreign exchange and OTC interest rate derivatives markets took place in April 2016, and the results were published in September.
CME Reports Record Trading Day CME Group reports that it reached a new record high in single day volume on November 9, with 44.5 million contracts traded across all asset classes, breaking the previous record set in October 15, 2014, by 12.7%. This volume was obviously driven by the unexpected victory of Donald Trump in the US presidential election on Tuesday. Japanese yen futures hit 583,063 contracts, the previous record high of 550,553 set on June 7, 2013. Meanwhile, Mexican peso futures reached 224,028 contracts, up from the prior record of 208,499 set on December 8, 2014.
ForexClear Sees Record Activity in October ForexClear, LCH Clearnet’s centrally cleared FX operation, reported record volumes in October, driven in large part by activity in Latin American currencies. The CCP cleared $500 billion in notional in October, with over 20,000 trades cleared in just one week and almost 80,000 cleared during the entire month. By contrast, in July less than 20,000 contracts with a notion value of less than $125 billion were cleared at the CCP. ForexClear says that while an increase in Asia currency NDF volumes helped drive this growth, Latin American currencies saw and even greater increase in activity, with $64 billion of BRL fixing at the end of the month.
CME Widens Price Fluctuation Bands Ahead of US Poll CME Group has issued an advisory stating that its Global Command Centre (GCC) has taken “emergency action” ahead of this week’s US election by widening the price fluctuation bands on interest rate futures contracts traded on CME and Chicago Board of Trade (CBOT), which is part of the CME Group. CME says the temporary modification of the price fluctuation limits is a precautionary measure “to ensure fair and orderly trading in these products based on the material likelihood of a marked increase in price volatility expected to result from the General Election vote in the United States to be held of November 8, 2016”.

LCH Launches Solution for Uncleared Derivatives Clearing house LCH is moving into the non-cleared space with the launch of LCH SwapAgent, a new service for the non-cleared derivatives market. The clearing house says LCH SwapAgent will provide market participants with a number of solutions designed to materially improve standardisation, efficiency and simplicity in the bilateral derivatives market. It will act as an independent calculation agent, facilitating the calculation and exchange of bilateral margin and settlement payments, but will not become the central counterparty to the trade.
Bats Completes Javelin SEF Acquisition Bats Global Markets completed its acquisition of Javelin SEF, a swap execution facility (SEF). The deal was announced on August 11, 2016 and received approval from the Commodity Futures Trading Commission (CFTC) on October 23, 2016. Javelin has been integrated with Bats Hotspot, the institutional FX trading platform, in order to enable trading in non-deliverable forwards (NDFs). Hotspot already offers trading in outright deliverable forward contracts. Dodd Frank Act provisions mandate that certain market participants have to trade NDFs on SEFs.
GMEX Restructures Business GMEX Group has announced a restructuring of the business by spinning off its subsidiary GMEX Technologies. Forum Trading Solutions, currently a minority stakeholder in GMEX, has acquired 100% of GMEX Technologies, including clients and the GMEX name related trademarks. The current GMEX Tech and Forum businesses, which already work closely together, will merge operations and will operate under the GMEX Group and GMEX Technologies names with associated GMEX branding. They will continue to provide multi-asset exchange and post trade business services and technology covering all the market infrastructure value chain.