BNY Mellon Clearing, a division of US custodian and asset servicing bank BNY Mellon, has joinedderivatives exchange CME Group to clear OTC interest rate swaps on behalf of its institutional clients.
The move is partly a response to the Dodd-Frank Act passed in the US last year, which mandated clearing of standardised OTC derivatives by the end of 2012 – a measure that is expected to significantly increase the proportion of derivatives transactions cleared centrally.
Launched in June 2010, BNY Mellon Clearing provides direct clearing services with major exchanges and central clearing houses, including the New York Mercantile Exchange and Chicago Board of Trade, which are operated by CME Group, and International Derivatives Clearing Group.
“While it appears that a large percentage of OTC derivatives transactions will become centrally cleared, we believe that the near-term interest among the industry will be focused on interest rate swaps,” said Sanjay Kannambadi, CEO of BNY Mellon Clearing. “By joining CME Group as a clearing member for OTC interest rate derivatives, we have expanded the options available to our clients.”
BNY Mellon operates in 36 countries and serves customers across more than 100 markets. The firm has US$26.3 trillion in assets under custody and administration and US$1.3 trillion in assets under management.