ASX: The centre for managing Australian risk
ASX has delivered world class financial markets infrastructure including a central clearing service for OTC Interest Rate Derivatives which has been tailored for the needs of the Australian market.
- Initial Australian Dollar OTC Derivatives product coverage including
- Fixed vs Floating Interest Rate Swaps (BBSW 1m and 3m 0-10 years, 6m 0-30 years)
- Overnight Index Swaps (Zero Coupon 0-1 year, Annual Paying 0-3 years)
- Basis Swaps (1m vs 3m, 3m vs 6m, 1m vs 6m, all 0-10 years)
- Delivered under the existing ASX Clear (Futures) Australian Clearing and Settlement Facility licence.
- Portfolio margining between OTC Interest Rate Derivatives and ASX 24 exchange-traded interest rate futures products.
- Industry approved margining model based on a Historical Value At Risk methodology
- Market standard connectivity arrangements with Trade registration via the MarkitSERV trade affirmation platform.
- 15-hour operating cycle between 6:00am and 9:00pm AEST, with close to real-time Futures style novation.
CFTC has granted ASX Clear (Futures) with “no-action” relief. Under this relief, ASX Clear (Futures) is permitted to clear Australian and New Zealand dollar-denominated interest rate swaps for the proprietary trades of qualified U.S. Clearing Participants and their parent entities and affiliates. A copy of the no action relief letter is available.
Enhanced Client Protection Structures
In 2014 ASX established an account structure that enables its Participants to offer their futures and OTC Derivative customers an account option that allows for separate identification and protection of individual customers’ gross positions and collateral value.
In response to the RBA’s supplementary guidance on the Financial Stability Standards for central counterparties addressing Segregation and Portability, ASX intends to consult on rule amendments that will enable excess customer collateral for derivatives to be held directly with ASX. A service offering that makes this choice available is scheduled for the first half of 2015 following regulatory clearance.
ASX OTC Interest Rate Derivatives Clearing Service Operating Rules
Prospective Dealers, Clients and Clearing Participants of the ASX OTC Client Clearing Service can access a comprehensive listing of ASX OTC Operating Rules and information below:
To provide prospective Clients and Clearing Participants an introduction to the ASX OTC Client Clearing Service, ASX has produced a service description outlining the core components of the service, two FAQ documents; one for Clients, one for Clearing Participants and fact sheets for Client Clearing.
- OTC client clearing service description
- Clearing Participants FAQ
- Clients FAQ
- Client Fact Sheet
- Client Protection Model Fact Sheet
Dealer to Dealer Clearing
ASX currently has 8 OTC Clearing Participants that are major swap dealers in the Australian market. For further information on becoming an ASX OTC Clearing Participant, please refer to the link below or contact ASX Business Development for further information.
For further information please contact ASX Business Development:
Allan McGregor - Senior Manager, OTC Markets
ph: (02) 9227 0814
ASX Business Development Group