With the commencement of U.S. Treasury and Eurodollar futures products, NYSE Euronext (NYX)’s futures exchange NYSE Liffe U.S. also launched an innovative joint venture of the New York Portfolio Clearing (NYPC) and the The Depository Trust & Clearing Corporation (DTCC).
NYPC is the derivatives clearinghouse that will deliver “one-pot” margining of interest futures positions cleared by NYPC with fixed income cash positions cleared by DTCC’s Fixed Income Clearing Corporation (FICC).
Soon after the launch, NYSE Liffe U.S. will start its trading of Eurodollar futures from March 21, 2011. Further, NYSE will begin its trading of 2-year, 5-year and 10-year U.S. Treasury futures along with U.S. Bond and Ultra Bond futures products on March 28, 2011.
Further, the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) have given their consent to NYPC for clearing products.
NYPC’s board has also approved its clearing members. However, other major firms are awaiting NYPC board approval in the process of becoming clearing members, including Bank of America Merrill Lynch, a unit of Bank of America Corporation (BAC), Citigroup Global Markets Inc., a wing of Citigroup, Inc (C) and Deutsche Bank Securities Inc., an arm of Deutsche Bank AG (DB).
We believe that the interest-rate products trading on NYSE Liffe U.S. and the clearing efficiencies of NYPC will create an entirely new transaction and risk management standard.
Moreover, interest-rate futures traded on NYSE Liffe U.S. will benefit from the powerful capital efficiencies of NYPC’s ‘one-pot’ margining which, for the first time ever, will assess margin across fixed income securities, repos and interest rate futures to more accurately capture the actual risk of a clearing member’s portfolio.
Additionally, all U.S. Treasury Futures traded on NYSE Liffe U.S. will benefit from an innovative, streamlined delivery process allowing for the seamless netting of futures and cash securities.
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
DEUTSCHE BK AG (DB): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis Report
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