CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Chicago Mercantile Exchange Inc. obtained full recognition as a foreign central counterparty (CCP) in Mexico from the Banco de México, effective September 2, 2016.
Since April 2016, the clearing house division of CME Group, CME Clearing, had operated under temporary recognition pending finalization of a memorandum of understanding (MOU) between the Commodity Futures Trading Commission, Banco de México and the Comisión Nacional Bancaria y de Valores (CNBV).
Execution of the MOU and extension of CME Group’s recognition provide uninterrupted access and additional certainty for Mexican market participants subject to the local Mexican Peso (MXN) Interbank Equilibrium Interest Rate (TIIE) swap clearing mandate to fulfill their obligations at CME Clearing.
“This recognition as a CCP will strengthen CME Group’s ability to help our clients in the region effectively manage their risk,” said Sunil Cutinho, Senior Managing Director, and President of CME Clearing. “As our clients continue to increase their voluntary clearing of MXN interest rate swaps, we look forward to bringing greater liquidity and transparency to this significant and rapidly-growing market.”
With this recognition, CME Clearing can continue providing Mexican participants clearing and settlement services in its OTC interest rate swaps (IRS), including CME Group’s MXN IRS. Since launching the product, CME Group has cleared over $1.85 trillion in MXN IRS and open interest has grown to more than $895 billion.
More than 85 market participants have cleared MXN IRS through CME Clearing, with 20 dealers providing liquidity.
CME Group offers clearing in 19 IRS currencies and is the only global clearing house to offer central clearing for MXN IRS, Brazilian Real (BRL) IRS and U.S. Dollar Swaptions (USD).
Earlier in the day it was announced that CME was authorized as a CCP in Hong Kong.