Barclays has successfully cleared in excess of USD1 trillion notional of interest rates, credit and FX over-the-counter (OTC) derivatives transactions on behalf of its clients.
Over the past months, Barclays has seen a significant increase in clients voluntarily clearing, underscoring the heightened focus that buy-side clients are placing on central clearing. Since clearing the industry’s first client CDS transaction and the first client interest rates transaction in December 2009, Barclays has consistently invested in its business and worked with clients and other industry participants to prepare for centralised clearing ahead of regulatory deadlines.
Barclays USD1 trillion of cleared notional transactions includes some 11,000 derivatives contracts executed by regional banks, investment managers, pension funds, insurance, hedge funds and government agencies across the world. The transactions, covering eight currencies, four high-yield indices and nine investment grade indices, were cleared at LCH.Clearnet, CME Group or IntercontinentalExchange.
“Barclays has a very strong commitment to helping drive industry solutions significantly ahead of deadlines for regulatory change, and to providing the best possible clearing capabilities,” says Michael Yarian, Head of Agency Derivatives Services. “We are therefore very pleased to have achieved this milestone. The investments that we have made in our platform have allowed us to provide scale quickly and easily for clients who are voluntarily moving to a centrally-cleared business model.”
Over the past several years, Barclays has worked with clients and other industry participants to prepare infrastructure, build systems and test operational readiness ahead of regulatory deadlines. This has helped to demonstrate to all market participants the steps needed to obtain the risk, capital, and operational efficiencies that central clearing creates. Regulators across the globe have mandated central clearing to create more transparency in OTC derivatives markets and reduce counterparty risks.
“While this volume of clearing is significant, we believe it is only a very small portion of what will be cleared as regulatory deadlines approach and more clients move to a centrally-cleared model,” said Ray Kahn, Head of OTC Derivatives Clearing. “To successfully achieve the automation and straight-through processing needs of central clearing, industry participants need to make significant investments in infrastructure and testing. Our work over the past two years allows us to provide practical solutions to our clients.”
