Eurex has introduced a new clearing architecture to support both listed and OTC derivatives and compliance with sweeping new European derivatives regulations.
The new system, branded C7, has been designed specifically in response to new rules under the European market infrastructure regulation (EMIR) and follows the launch of the T7 trading architecture last year.
The German exchange is implementing an aggressive growth plan for Europe’s clearing space, with an aim to capture business through its margin and capital efficiencies.
Regulatory mandates have created a new wave of competition for cleared OTC derivatives, with Eurex set to compete with transatlantic heavyweight LCH.Clearnet in the new area.
The exchange believes buy-side firms will be able to lower their capital and funding cost by pooling clearing business on an integrated cross-product CCP.
This view was supported by a study from consulting firm Oliver Wyman earlier this year, which found that savings could be up to €5 billion for buy- and sell-side firms combined.
C7 provides a system for both OTC and listed derivatives for the first time and supports different business models based on EMIR compliant segregation models.
The successful launch of the new system marks the first step for Eurex in a three-stage introduction process.
The German exchange has said all listed derivatives products will be available for clearing through C7 by summer 2015.