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Strongest supporters of Partnership Program join Eurex Clearing governance

Release date: 12 Jun 2018 | Eurex Clearing

Strongest supporters of Partnership Program join Eurex Clearing governance

Eurex Clearing continues to gain broad market support for its Partnership Program. So far, 28 market participants from the U.S., the U.K., Asia and Continental Europe have joined the program to support the joint objective of building a liquid alternative to clear Euro denominated OTC interest rate derivatives in the EU27.

The performance based program aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance. Against this background, Eurex Clearing installed a Fixed Income and Currency (“FIC”) Board Advisory Committee for the purpose of consulting with and making recommendations to the executive boards of Eurex Clearing with respect to the general FIC strategy as well as product and service expansions.

The Committee consists of ten members. They are nominated for a two-year term to the Committee based on their performance in the Eurex Clearing Partnership Program. In addition, the five most active participants of the Partnership Program will be represented in Eurex Clearing’s supervisory board.

Average daily cleared volume in Interest Rate Derivatives multiplied fifteen fold to EUR 71 billion in May 2018 from 5 billion last May. Notional outstanding stood at EUR 6.5 trillion compared to EUR 1.4 trillion end of May 2017. This means that Eurex Clearing now holds a market share of roughly 7 percent1) in the global euro denominated interest rate derivatives market.

There is no evidence for the concern of market participants that a fragmentation of the existing liquidity pool would lead to significant cost increases in particular for EU27 buy side firms. For almost all relevant tenors, 19 banks supply quotes on request via Tradeweb and/or Bloomberg and 11 banks are currently actively streaming live prices on the platforms largely at the same bid/offer spread and size as LCH.

1) Based on Notional Outstanding in Euro denominated OTC Interest Rate Derivatives published on the websites of Eurex Clearing, LCH and CME (as of 31 May 2018)