NEW YORK--(BUSINESS WIRE)--New York Portfolio Clearing, LLC (NYPC), the innovative derivatives clearing house that will deliver single-pot margin efficiency between fixed income securities and interest rate futures, announced today that the Commodity Futures Trading Commission (CFTC) has granted NYPC registration as a U.S. Derivatives Clearing Organization (DCO) pursuant to the Commodity Exchange Act. The CFTC’s approval represents a significant step towards bringing the unique capital and operational efficiencies of NYPC to global fixed income traders.
“NYPC’s DCO registration is an important milestone in the transformation of the U.S. derivatives market towards a more open and competitive structure,” said Walt Lukken, Chief Executive Officer of NYPC. “The innovative operational and capital efficiencies of NYPC’s cross-margining system will be a powerful catalyst for new competition in our industry while increasing transparency and mitigating systemic risk. We appreciate the significant time and consideration that the Commission has taken in granting this groundbreaking DCO registration.”
NYPC is a joint venture of The Depository Trust & Clearing Corporation (DTCC) and NYSE Euronext (NYX). This platform was created to deliver unique capital efficiencies to the market by netting and reducing risks between a clearing member’s portfolio of cash bonds and derivatives. It will also provide important operational efficiencies that reduce systemic risk and enhance market efficiency, such as the “locked-in” trade delivery process to allow expiring futures to be submitted to FICC for physical delivery.
NYPC intends to initially clear Eurodollar and U.S. Treasury Futures for NYSE Liffe U.S., the U.S. derivatives exchange of NYSE Euronext. NYPC’s cross-margining arrangement with DTCC’s Fixed Income Clearing Corporation is currently under review with the CFTC and the Securities and Exchange Commission. Pending regulatory approvals, NYPC expects to begin operations in late first quarter of 2011.
For more information, please visit: www.nypclear.com.
New York Portfolio Clearing, LLC (NYPC) is registered as a U.S. Derivatives Clearing Organization with the Commodity Futures Trading Commission. Pending regulatory approvals, NYPC will clear interest rate products and will support the cross-margining of fixed income cash products from Depository Trust & Clearing Corporation’s Fixed Income Clearing Corporation with their related, offsetting derivatives trades in a “single pot.” This innovative approach to margining will deliver significant capital and operational efficiencies for market participants, while reducing risk and enhancing transparency. For more information, please visit: www.nypclear.com.