ASX, the owner of the Australian Securities Exchange, has announced plans to launch by the end of 2013 both a clearing service for OTC derivatives and a collateral management service.
The new OTC Derivatives Clearing Service will also provide onshore client clearing for Australian investors, subject to regulatory approval. The new service will provide client protection mechanisms in the event of a counterparty default. Additionally, it will permit cross-margining benefits with existing ASX derivative products.
"Australian clients should have a choice to use an Australian clearing service where their collateral is protected and that is governed by Australian regulatory authority," said David Dixon, CIO of Colonial First State Global Asset Management, one of the firms with which ASX had worked during the consultative process.
In its development phase, ASX had worked with a total of nine major funds managers and state government treasuries to develop the new OTC derivatives clearing capabilities
"ASX is working with seven banks on the technical design of its clearing services," said Elmer Funke Kupper, ASX's managing director and CEO. That programme is anticipated to develop an OTC derivatives clearing service for A$ interest rate swaps by the middle of this year.
By; Simon Osborne