Chicago Mercantile Exchange Group (CME) has launched clearing services for over the counter (OTC) London gold forwards. CME said that clearing services will be available through CME ClearPort. Its a set of flexible clearing services open to OTC market participants to substantially mitigate counterparty risk and provide capital efficiencies across asset classes.
CME Clearing is expected to provide post-trade clearing services for physically delivered OTC London gold forwards. CME Clearing will remain in the delivery process throughout settlement and ensure transfer of gold and dollars between counterparties. CME ClearPort continues to provide solutions for capital allocation with multilateral netting and cross-margining.
Joe Raia, MD of energy and metals products at CME Group, said: “Launching our clearing services for London gold forwards is in direct response to customers’ need for a secure way to manage counterparty credit exposure. This post-trade service allows trades to be privately negotiated and executed off-exchange and then submitted through CME ClearPort for clearing. This allows counterparties to continue to trade as they always have while transferring credit risk to CME Group.”
Clearing services for house business will commence on August 23 for trade date August 24, with customer segregated activity following within 90 days of commencement. These contracts are subject to COMEX and CME rules and regulations.
CME Group is a diverse derivatives exchange. It offers a range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investment products such as weather and real estate.
