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State Street Unveils OTC Swaps Clearing Service

State Street announced the launch of a derivatives clearing service prior to the new rules governing the over-the-counter swaps market going into effect.

State Street announced the launch of a derivatives clearing service prior to the new rules governing the over-the-counter swaps market going into effect.

The firm said the service is an extension of its futures commission merchant system and will now include collateral management, valuations, risk management, and analytics. The move comes ahead of the Dodd-Frank bill’s requirement that OTC derivatives trades be centrally cleared. Under the new law, trading partners will have to work through an FCM that acts as an intermediary between clients and the central clearing counterparties.

Dodd-Frank also imposes collateral and real-time reporting requirements that are designed to reduce counterparty risk and boost transparency, State Street noted.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio

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