The Nasdaq OMX Group, an exchange company and The Bank of New York Mellon, the global securities servicing and asset management firm, has jointly announced that The Bank of New York Mellon has made a strategic minority investment in International Derivatives Clearing Group (IDCG).
As part of the investment, Art Certosimo, Senior Executive Vice President and CEO of Broker-Dealer Services and Alternative Investment Services for The Bank of New York Mellon, will join the board of IDCG.
IDCG will utilize The Bank of New York Mellon’s securities servicing products, including margin and collateral management. This will help clients of both firms with solutions that meet their end-to-end OTC derivatives clearing and processing needs, which are critical to addressing current regulatory and infrastructure challenges.
Gerald Hassell, President of The Bank of New York Mellon, said: “This strategic partnership with Nasdaq OMX provides our buy side and sell side clients with a flexible platform that meets their derivatives trading, clearing and servicing needs. We will continue to support the development of market infrastructure that enhances the transparency and stability of the global financial markets by addressing counterparty and systemic risk concerns.
Bob Greifeld, CEO of Nasdaq OMX, said, “Nasdaq OMX is pleased to have partnered with a global institution such as The Bank of New York Mellon that shares our vision to provide efficient derivatives clearing using a central counterparty system, one that reduces credit risk in the large OTC interest rate swap market. The timing of this strategic investment reinforces the strength of our clearinghouse model. It also lends support to President Obama’s proposed reforms of the OTC derivatives market.
Chris Edmonds, CEO of IDCG, said: This investment in IDCG by The Bank of New York Mellon is another important and timely step in the strategic growth of our company. We look forward to working with The Bank of New York Mellon and maximizing their OTC derivatives offering as IDCG evolves.
IDCG is a majority owned, independently operated Nasdaq OMX subsidiary that serves as a designated clearing organization for clearing and settling interest rate swap contracts and other fixed income derivatives contracts.
