Pierpont chooses SwapClear for OTC clearing
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.”