BNY Mellon and The International Derivatives Clearing Group (IDCG) have said that BNY Mellon Clearing will become a clearing member of the International Derivatives Clearinghouse (IDCH), a derivatives clearing organization regulated by the US Commodity Futures Trading Commission (CFTC).
With this membership, BNY Mellon Clearing, will be able to offer its clients central counterparty clearing of interest rate derivatives, which are an important financial risk management tool for corporations, investors, and municipalities worldwide.
BNY Mellon said that its clients and their market makers will be able to continue to execute interest rate derivatives in the well-established OTC market. With this new membership, clients will also be able to benefit from counterparty credit risk mitigation, special bankruptcy provisions related to margining, and transparent portfolio valuation offered by IDCG through its clearinghouse.
Sanjay Kannambadi, CEO of BNY Mellon Clearing, said: “With the rapid changes occurring in the clearing and settlement process for derivatives, our clients want a capable, stable partner that has membership in clearing organizations like IDCG to support their growing and evolving trading needs.”
Garry O’Connor, CEO of IDCG, said: “IDCG is pleased to welcome BNY Mellon Clearing onto our platform. The ascension of clearing members from the banking community is an important step forward for IDCG, and demonstrates the market’s broader movement towards our clearing solution.”
IDCG is an independently operated, majority owned subsidiary of The Nasdaq OMX Group.