Eurex Clearing’s profit sharing scheme gains ground in euro clearing battle

Major institutions have registered for Eurex Clearing’s partnership programme which shares profit of interest rate swaps business.

Eurex Clearing’s recently established partnership programme for its interest rate swaps clearing service has gained significant ground with more than 20 market participants signed up.

HSBC, UBS, Bank of America Merrill Lynch, Citigroup, Commerzbank, Deutsche Bank, JP Morgan and Morgan Stanley are among those to have officially registered, having shown interest when the scheme was first announced in October.

The programme - established in consultation with major institutions - awards its 10 most active participants with a ‘significant’ profit share of the multi-currency interest rate swaps business.

Larger clients will also be included within the governance and committee structure of Eurex Clearing.

The firm described the scheme as a performance based programme, which “aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance”.

“Clients are looking for a market-led alternative to clear interest rate swaps – and we are a committed partner”, says Erik Müller, CEO of Eurex Clearing.

“This way we support the financial industry in times of enduring uncertainty and foster choice and competition in the interest rate swap market together with our clients.”

The scheme is a push to win euro-denominated derivatives volumes from London’s LCH, which holds the majority of banks and buy-side clearing business.

LCH also operates a profit-sharing model, which has helped it win competition from its US counterparts for the majority of swaps clearing globally.