Two major banks, UBS and Wells Fargo Securities, have signed up with derivatives exchanges in Asia and the US as clearing members.
The Singapore Exchange (SGX) has added investment bank UBS to its AsiaClear platform as a new SGX bank clearing member, allowing it to clear OTC traded financial derivatives in the country for the first time.
The signing of UBS brings the total number of such members on SGX AsiaClear to 11, following the addition of Credit Suisse, which joined in December 2010. The other members on the platform are Barclays, Citibank, DBS Bank, Deutsche Bank, HSBC, Oversea Chinese Banking Corporation, Royal Bank of Scotland, Standard Chartered Bank and United Overseas Bank.
Muthukrishnan Ramaswami, president of SGX said that the interest in the exchange's OTC market was encouraging, and that the venue expected to add foreign exchange forwards to its clearing offering in Q2 2011.
Meanwhile, Wells Fargo Securities, a subsidiary of regional investment bank Wells Fargo, has joined US derivatives venue the Chicago Mercantile Exchange (CME), enabling it to clear OTC interest rate derivatives.
Under powers granted by the Dodd-Frank Act, signed into law in July 2010, US regulators are currently developing rules for exchange trading, clearing and data collection of OTC derivatives. These are expected to result in the majority of derivatives trades being cleared centrally, increasing market transparency and reducing risk for trading participants.
“Selecting the CME as our OTC interest rate derivatives clearing solution will allow Wells Fargo to reduce risk in the financial sector while meeting its regulatory obligations,” said Paul Rettig, head of technology, operations and compliance for Wells Fargo Securities.