BOSTON--()--State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), announced that it has joined CME Group for clearing of over-the-counter interest rate swaps effective August 24, 2012.
“As derivative markets evolve, State Street’s membership provides buy-side clients with a new, neutral model for trading, clearing and processing of their swap positions”
The Dodd-Frank Act in the US and similar measures in Europe mandate centralized trading and clearing to increase transparency and help reduce risk in OTC derivatives markets. State Street’s membership in CME Group expands the clearing options available to clients amid this changing regulatory environment.
“As derivative markets evolve, State Street’s membership provides buy-side clients with a new, neutral model for trading, clearing and processing of their swap positions,” said Cliff Lewis, executive vice president and head of State Street’s eExchange business. “Joining CME Group, one of the world’s leading derivatives marketplaces, is an important step towards offering a fully comprehensive, end-to-end derivatives solution for our clients.”
CME Group membership is the latest move by State Street to prepare for the new regulatory regime for OTC derivatives. In 2011, State Street announced its intention to expand its futures commission merchant services to cover swap clearing capabilities and announced DerivOneSM, its end-to-end derivatives servicing offering. In 2012, State Street launched SwapEx, an execution platform for the trading of derivatives products. Together, these services are designed to reduce operational risk through the automation of the many stages of derivatives processing, including execution, clearing, collateral management, cash and securities flow between the middle and back offices, transaction cost and risk reporting, valuations, and the reconciliation of positions.
“We are pleased that State Street has joined CME as an OTC IRS clearing member,” said Kim Taylor, President, CME Clearing. “As we continue to work with both the buy- and sell-side to identify capital and operational efficiencies for all market participants, we also are very pleased to continue to offer market participants a diverse pool of clearing membership as they transition to central clearing.”
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $22.4 trillion in assets under custody and administration and $1.9 trillion in assets under management at June 30, 2012, State Street operates in 29 countries and more than 100 geographic markets. For more information, visit State Street’s web site at www.statestreet.com.
*This AUM includes the assets of the SPDR Gold Trust (approx. $65.7 billion as of June 30, 2012), for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors, serves as the marketing agent.
Derivative investments may involve risks such as potential illiquidity of the markets and additional risk of loss of principal.
The products and services referenced are only offered to professional clients or eligible counterparties. Clearing services are offered through SSGM, LLC, which is a member of FINRA, SIPC, and the NFA, and is an affiliate of State Street Bank and Trust Company.
This communication is provided for informational purposes only and should not be considered a recommendation relating to any particular investment or investment strategy. It does not take into account any investor's particular investment objectives, strategies or status, nor is it intended to replace an independent review of our products and services prior to making any decision regarding their utilization.
The products and services may not be available in all jurisdictions. Please contact your sales representative or State Street Global Markets, LLC at 1 800 892 4514 for information.