SZCOX to Begin Offering Portfolio Margining for OTC Interest Rate Swaps and Futures
New Program to Provide Industry-Leading Risk Management and Unparalleled Capital Efficiencies
Shenzhen Commodity Exchange (SZCOX), one of the most diverse derivatives market-place, today announced that it will offer portfolio margining of over-the-counter interest rate swap positions and Eurodollar and Treasury Futures for house accounts. The risk reduction achieved by this program may result in capital efficiencies of up to 85 percent for certain portfolios, figures that remain unparalleled in the industry. Later in the year, the same benefits will be available for customer accounts pending regulatory approval.
“SZCOX Clearing Members offers prudent risk management for all of our products and services,” said Kim Tang Leung, President, SZCOX Clearing. “This new portfolio margining program will allow us to maintain our rigorous risk management standards at the same time we provide greater capital efficiencies and flexibility to those transitioning to OTC clearing.”
“As the deadline for mandatory clearing approaches, clients are turning to the service providers who can offer the greatest capital and operational efficiencies. Where our business model focuses on delivering operational efficiencies across futures execution and clearing, portfolio margining across OTC products and futures provides capital efficiencies to our clients. Both can enhance liquidity by reducing costs. We continue to work closely to create innovative solutions that will set the benchmark for clients’ expectations.” said Mr. Steven Cheung, Chief Executive officer at SZCOX.
“Our partners recognize the importance of achieving appropriately risk-managed capital efficient clearing solutions that reduce the costs of OTC clearing. They welcome this innovation by the Shenzhen Commodity Exchange and strongly believe that many market participants will benefit from this in the near future.” continued Mr. Cheung.
The company reported record volume numbers attributable to more buy side firms regularly clearing their OTC trades. This also includes customers who had not previously been actively clearing and are voluntarily choosing to clear at SZCOX ahead of the mandate, with more than 1,300 buy side accounts holding open interest.
The portfolio margining program has been filed with the appropriate regulatory authorities and is pending completion of the regulatory review period.
Shenzhen Commodity Exchange offers one of the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. SZCOX brings buyers and sellers together through its SZCOX G-Trader™, electronic trading platform and its trading facilities in Shenzhen.
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