Goldman Sachs has launched a clearing service for OTC derivatives, building on its existing prime brokerage and futures clearing platforms.
The new offering, Goldman Sachs Direct Clearing Services (DCS), aims to provide clients with a global clearing service for interest rates, credit, foreign exchange, equities and commodities derivatives that are traded OTC.
Concerns over OTC derivatives were heightened in the recent financial crisis because a perceived lack of transparency in the market led to uncertainty over firms' positions and exposure to some instruments, particularly credit default swaps.
In the US, Congress recently approved legislation which would require derivatives that can be standardised to be traded and cleared on exchange, and data on OTC derivatives trades to be collected and published via clearing houses or swaps repositories.
This follows similar moves in Europe, where the EU has already introduced mandatory clearing of all standardised OTC derivatives and reporting of all OTC derivatives to trade repositories.
“In partnership with our clients, regulators and multiple clearing venues, we are committed to improving market structure for derivatives,” said Michael Dawley, managing director and co-head of futures and DCS, Goldman Sachs. “The DCS offering provides our clients with a host of value-added services and multi-product expertise to successfully navigate this dynamically changing environment.”