MarkitSERV sees 48% clearing volume rise

Aug 27, 2013
MarkitSERV sees 48% clearing volume rise

Post-trade processing specialist specialist MarkitSERV has seen a jump in buy-side subscriptions as Dodd-Frank Act rules mandating post-trade reporting and clearing of OTC derivatives kicked in.

The firm also saw a significant jump in use of its clearing connectivity service, which processed over 600,000 trades between March 11 and the end of July.

In anticipation of new clearing rules, the volume of trades submitted for clearing through MarkitSERV leapt up 48% from the same period in 2012. This figure includes more than 120,000 “client” trades, those in which at least one party is not a member of a clearinghouse. Over 300 new buy-side subscribers signed up after they were phased into the regulations requiring the post-trade reporting and clearing of certain OTC derivatives in June.

MarkitSERV recently added LCH. Clearnet to its roster of clearing providers in June. Other CFTC-registered derivatives clearing organisations (DCOs) with connectivity to MarkitSERV include CME, ICE Clear Credit, ICE Clear Europe, LCH.Clearnet’s SwapClear US and UK, and Options Clearing Corp.

It is also linked with Eurex Clearing AG and LCH. Clearnet-owned CDSClear, which both have DCO applications pending.

The mandatory clearing of certain OTC derivatives, including interest rate swaps and credit default swaps, came into effect on 11 March and is being implemented in three stages. Most buy-side firms were required to comply with the rules from 10 June.

Henry Hunter, managing director and head of product management for MarkitSERV, said: “The CFTC’s Category 2 deadline affected a large number of firms and the industry has accomplished a lot in a short time. MarkitSERV gives customers a practical cross-asset solution that helps them process, clear and report OTC derivative transactions.”

Quam joins CME Group’s Hong Kong hub

Quam Securities, the brokerage arm of Hong Kong-based financial services group Quam Limited, has registered with the Hong Kong telecommunications hub of Chicago Mercantile Exchange enabling it to access the CME Globex trading platform.

via Pocket July 27, 2013 at 03:43PM

CME Group Announces First Trade of New USD-Denominated Palm Oil Swaps – Jul 1, 2013

CME Group Announces First Trade of New USD-Denominated Palm Oil Swaps – Jul 1, 2013.

UK’s Fastest Growing International FX & Payments Business Acquires Bank’s FX Arm

LONDON, UNITED KINGDOM–(Marketwired – June 18, 2013) – Cambridge Mercantile Group, the UK’s fastest growing international FX and payments business(1) , is to acquire the FX division of Raphaels Bank.

via Pocket June 18, 2013 at 09:46PM

Chris Fix delivers on Asia promise for Dubai bourse

Chris Fix delivers on Asia promise for Dubai bourse


Chris Fix, the chief executive of the Dubai Mercantile Exchange who was tasked last year with growing the Asia-Pacific membership of the exchange, has signed up its first full trading member from Japan.

Fix delivers on Asia promise for Dubai bourse

Mitsubishi Corporation, one of Japan’s largest trading companies, became a full DME trading house member yesterday. The exchange has also held talks with companies from elsewhere in Asia, including Korea, according to one person familiar with the situation.

Fix, who became DME chief executive in August 2012, was brought in with a mandate to grow the exchange’s Asia-Pacific reach. Fix joined the exchange from French bank BNP Paribas, where he had helped build the bank’s customer base in Asia four-fold during his time there.

Ahmad Sharaf, chairman of the DME, said at the time of Fix’s appointment: “When we restructured the DME in February of this year, we signalled our intention to place more emphasis on the increasingly important Asian market. The appointment of Christopher Fix as the new DME chief executive, with the Asian market knowledge and experience he brings, is a real tangible expression of that commitment.”

The restructuring of the DME in February 2012 saw the CME Group double its stake in the exchange to 50% and the Oman Investment Fund increase its holding to 29%.


Since the restructuring, the exchange has admitted three new members: Indian holding company Reliance Industries, RBS and Mitsubishi. The DME now has a total of 31 members.

RBS was admitted as a clearing member in March, as first reported by Financial News. Reliance and Mitsubishi have both joined as trading members.

The DME has also been trying to raise the profile of its Asian oil benchmark, based on the DME Oman Crude Oil Futures Contract. Fix said yesterday: “Mitsubishi’s decision to acquire a membership is a major endorsement of DME Oman’s position as the new benchmark for crude oil trading for the Asian markets.

“With the strong support of customers like Mitsubishi, DME continues to move from strength to strength and is perfectly positioned to bridge the rapidly expanding crude oil corridor between the Middle East and Asia.”


–write to and follow on Twitter: @journosooz

Making Speed an Asset for Asset Managers

You may already have read the Wall Street Journal article regarding the variation in the speed of trade reporting on the Chicago Mercantile Exchange for different market participants (May 1, 2013 High-Speed Traders Exploit Loophole).

via Pocket June 10, 2013 at 07:29PM

Tradition Launches New Volatility Futures Platform – Streamlined Negotiation Of CME Group Futures With Variance Pay-Off

Tradition, one of the world’s largest interdealer brokers in over-the-counter commodity and financial products, has today announced the launch of Volatis, a new hybrid platform designed to facilitate the negotiation, and subsequent trading of, realised volatility futures with a variance pay-off l

via Pocket June 10, 2013 at 07:00PM

BGC and Thesys form Epsilon Networks for microwave data networks for the financial community

BGC and Thesys form Epsilon Networks for microwave data networks for the financial community

First Published 31st July 2012

BGC Partners and Thesys Technologies partner to create high-speed microwave data networks

New York – BGC Partners has signed an agreement with Thesys Technologies to invest in the creation of high-speed microwave data networks for the financial community.

Starting with a route between Illinois and New Jersey at an estimated latency of under 8.5mS per roundtrip, the network is designed to transmit critical trading data related to the futures, equities, fixed income and other markets, between the CME, NASDAQ, BGC and ELX Futures data centers.

In addition to bandwidth leasing, Epsilon Networks will introduce a Fast Financials Feed (“FFF”) which will combine proprietary data delivery techniques with the microwave network route. FFF components will initially include access to BGC’s US Treasuries data products and through collaboration with data distributors, CME futures and equities data.

“We are constantly assessing new ways to further our position as one of the world’s premier suppliers of real-time, low latency trading solutions,” said Philip Norton, Executive Managing Director of E-commerce at BGC Partners. He continued: “Building the fastest high speed microwave information network will offer our customers a more rapid route to price discovery and arm them with the best tools possible to make smart trading decisions.”

“Working with Thesys to create the fastest access to critical trading data underscores our commitment as a leading inter-dealer broker to deliver compelling value solutions to our customers,” stated Richard Feldman, Director of BGC’s Strategic Transactions Group (“STG”). He continued: “The STG group is focused on identifying and evaluating new technologies, business investment and acquisition opportunities for BGC that align with our core markets and our customers’ needs while seeking to deliver attractive returns that will contribute to generating long-term value for our shareholders.”

Manoj Narang, CEO of Tradeworx, Inc., the parent company of Thesys Technologies, said: “We are delighted to partner with BGC in building the fastest microwave information network between Chicago and New Jersey, paving the way for improved price discovery and trading. We anticipate continued improvements in speed and reliability for the network based on the unique technology advantages that Thesys offers to its clients and partners.”

The microwave information network is expected to be operational during the fourth quarter of 2012.

Red-hot ethanol RINs move toward mainstream with futures

* Electronic platform for RINs in the works * Ethanol RIN market estimated $9 bln value * Market volatility spurs fears of fraud KANSAS CITY, May 10 (Reuters) – A little more light is about to fall on the murky, sometimes messy market for renewable-fuel credits, with the launch

via Pocket May 18, 2013 at 04:00PM

Red-hot ethanol RINs move toward mainstream with futures, in infancy but Platform coming

Red-hot ethanol RINs move toward mainstream with futures

* Electronic platform for RINs in the works

* Ethanol RIN market estimated $9 bln value

* Market volatility spurs fears of fraud

By Carey Gillam

KANSAS CITY, May 10 (Reuters) – A little more light is about to fall on the murky, sometimes messy market for renewable-fuel credits, with the launch next week of the CME Group’s first futures contracts for the government-mandated credits, known as “RINs.”

Created by a U.S. program aimed at boosting the use of renewable fuels such as ethanol in domestic motor fuel, Renewable Identification Numbers (RINs) have until recently been regarded as a somewhat untamed backwater of U.S. energy and agricultural markets, where trading is unregulated and pricing is sometimes hard to peg.

But ethanol RIN values have recently skyrocketed in price and volume has spiked as speculators join oil refiners, gasoline importers and others in a scramble for the credits, which are critical for oil companies to meet U.S. mandates for renewable fuels.

A 20-fold surge in prices this year has roiled Washington as oil industry leaders warn that consumers could get hit with higher gasoline prices if Washington does not step in.

In an effort to capitalize on the market interest, CME Group Inc., owner of the world’s largest futures exchange, will launch futures contracts for ethanol credits and other renewable fuels on May 13, allowing users to trade them alongside its benchmark crude and gasoline products. The IntercontinentalExchange launched its own on April 29.

“There is a lot of interest building around it,” said Dan Brusstar, senior director of energy research for CME Group. “Right now you don’t have good transparency. A lot of companies are leery of trading physical RINs. It (futures contracts) will bring some transparency to the market.”

But some market experts say many more steps are needed to bring transparency to the $9 billion ethanol credit market.

“It’s so new and it’s such a volatile market. It is really messy,” said Jeff Hove, vice president of RinAlliance, an Iowa-based aggregator and trader of RIN credits who handles RIN trades for more than 200 clients.


A RIN is actually a 38-digit number created for each gallon of renewable fuel. Typically the biofuel is then sold – together with the attached RIN – to an oil company that needs the fuel in order to blend with regular gasoline or diesel to meet the U.S. Renewable Fuel Standard.

Refiners and other so-called “obligated parties” that produce or import gasoline and diesel are required to present a certain number of RINs to the U.S. Environmental Protection Agency as proof of compliance with the RFS mandate. The policy is aimed at reducing the nation’s reliance on oil.

But some companies may have more RINs than they need, and some may have less – hence the evolution of a secondary market where the credits can be traded.

Without a central platform, packages of the ethanol credits are peddled by brokers who mostly rely on email and instant messaging exchanges with interested parties. Price discovery is often difficult, making some participants wary. Regulation is still evolving, spurring fears about fraud and pricing bubbles.

This March, prices for ethanol RINs shot up to about $1.04 a gallon, from only five cents four months earlier, fueling a debate about the knock-on impact for domestic fuel prices and the impact of speculation on the nascent, shadowy market. Ethanol RINs for 2013 were trading at about 78 cents a gallon on Friday.


Refiners have been lobbying Washington lawmakers and EPA officials to roll back renewable fuel mandates, claiming they are limited in how much they can blend and how much they can afford to spend on credits.

They say the price spike was due to the abrupt realization that there may be a shortage of RINs next year, when oil companies may be required to increase use of renewable fuels to the equivalent of more than 10 percent of the nation’s gasoline. The companies, however, may not be able to sell it all at gas stations, most of which are so far unwilling to sell a higher ethanol mix than E10.

Consumers will pay the price, they say.

“The surprise is over and, like every other manufacturing cost, it must be passed on,” Tom O’Malley, chairman of New Jersey-based refiner PBF Energy, said on a recent conference call with analysts.

Ethanol proponents say it is the oil industry, which is fighting efforts to blend more ethanol into gasoline, that is responsible for driving up RIN values. They argue that use of ethanol in gasoline has overall reduced pump prices.

Whatever the forces and factors, many of those participants in the market say growing volume and more volatile pricing for the credits means tighter regulation and more standardization is needed, and soon.

RIN trading is still in its infancy,” said Progressive Fuels Limited analyst David Dunn, whose company is partnering on development of an electronic trading platform for RINs.

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