Pierpont chooses SwapClear for OTC clearing

Swaps and fixed-income broker dealer Pierpont Derivatives has signed on to LCH.Clearnet’s SwapClear service.

Swaps and fixed-income broker dealer Pierpont Derivatives has signed on to Anglo-French central counterparty LCH.Clearnet’s SwapClear service.

The firm is now actively clearing OTC interest rate swaps (IRSs) via futures commission merchant (FCM) Nomura Securities International.

In December, LCH.Clearnet enhanced its US SwapClear service to accept a broader range of collateral for initial margin, offering increased connectivity and variable notional swaps.

“SwapClear allows new market participants like Pierpont Derivatives to decouple execution from counterparty credit concerns. With the expansion of its clearing expertise to clients via FCMs, SwapClear creates greater access to liquidity with reduced default risk – a benefit for all market participants,” said Akshay Das, managing director and head of derivatives sales and trading at Pierpont Derivatives. “Together, SwapClear and Nomura are supporting the commitment of Pierpont Derivatives to clearing interest rate swaps in advance of pending regulatory changes.”

In line with G20 mandates, Dodd-Frank Act aims to bring transparency and accountability to the regulation of the OTC swaps markets by requiring reporting swap data throughout the lifecycle of the trade, providing real-time dissemination of price and volume for public consumption and to help regulators conduct market oversight. Under the Dodd-Frank Act IRSs and credit default swaps must be cleared by July 2012.

“We are delighted to work with Nomura to facilitate Pierpont Derivatives’ first foray into interest rate swaps clearing,” said Daniel Maguire, head of SwapClear US. “Buy-side firms are recognising the risk management benefits of clearing, and are selecting SwapClear as it gives them unparalleled access to market liquidity.”