CME Group Inc., the biggest U.S. futures exchange operator, said on Monday that 10 top swaps dealers signed up to be founding members of CME’s interest-rate swaps clearing service.
The firms that signed a non-binding term sheet for the service were BofA Merrill Lynch, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank Securities Inc, Goldman Sachs Group, JPMorgan Chase & Co, Morgan Stanley, Nomura and UBS, CME said. It provided no details on terms of the agreement.
CME is aiming to take advantage of sweeping Wall Street reform enacted last summer that will force much of the $615 trillion global over-the-counter derivatives market onto clearinghouses such as that operated by CME. Interest rate swaps are the largest part of the OTC derivatives market, and a key target for CME, which operates the largest futures markets tied to U.S. interest rates.
CME’s swaps clearing effort will be advised by several large buyside firms, including BlackRock, Citadel, Fannie Mae, Freddie Mac and PIMCO, CME said.
CME has been clearing interest rate swaps since last October and has so far cleared just under $1 billion in swaps, it said.
