Spanish central counterparty (CCP) BME Clearing has launched an OTC interest rate swaps clearing service after receiving regulatory approval for the segment earlier this year.
With interest rate swaps set to be subject to central clearing requirements in 2016, clearing houses across Europe are gearing up for a wave of business from a market exceeding €270 trillion.
The rules are expected to come into force in Q2 next year with the buy-side then facing the mandate towards the end of the year.
BME Clearing will cover all the Euro-denominated contracts affected by the new regulation.
“With the creation of this segment, clients of BME Clearing stand to benefit as they will be able to comply with the clearing obligation at a reasonable cost while also achieving efficiencies in capital consumption derived from using a CCP for clearing their trades, instead of taking on counterparty risk in their bilateral transactions, which involves greater capital consumption,” said Ignacio Solloa, CEO of BME Clearing.