NYSE Euronext (NYX) and the Depository Trust & Clearing Corp. announced the creation of a new clearing house aimed at processing US fixed income derivatives.
The joint effort, called the New York Portfolio Clearing, or NYPC, will bring together cash positions of investors and their derivatives in an effort to substantially improve both operational and capital efficiencies.
“Recent market dislocation has underscored the need to improve market efficiencies and provide more thorough and timely information about the positions of participants across asset classes,” said CEO of NYSE Euronext Duncan L. Niederauer.
The move comes after President Obama’s proposal on Wednesday to regulate standardized OTC derivatives. The proposal requires these complex financial instruments to go through regulated exchanges and centralized clearing houses in order to have greater control over the risk involved in them.
The 50:50 joint venture is likely to be operational during the second-quarter of 2010, subject to regulatory approvals.
NYX, a Zacks #4 Rank (“Sell”) stock, has gained more than 3% on lower-than-usual volume of approximately 3 million, compared to average daily volume of about 4.9 million.
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