Mandatory clearing of over-the-counter interest-rate swaps in Europe is likely to be delayed past April because US clearinghouse standards have yet to be recognised, lawyers say. "They clearly want to get the equivalence thing sorted out because you cannot on the one hand have mandatory clearing and on the other hand have derivatives cleared on a US-based clearinghouse that is deemed not to be qualified," said Jonathan Herbst of Norton Rose Fulbright.
Intercontinental Exchange is set to establish an over-the-counter interest-rate swap-clearing service next year, just as mandatory European buy-side clearing rules are launched, a source says. ICE, which is active in the trading and clearing of credit default swaps and energy derivatives, staked a position in interest-rate futures last year.
January's volume for centrally cleared over-the-counter derivatives rebounded from December's light activity. Particularly noteworthy was LCH.Clearnet's clearing of $55 trillion, in notional value, in interest-rate swaps. Three-fourths of January's volume was transacted in either U.S. dollars or euros.
Jae-Joon Lim of the Korea Exchange says the exchange has been preparing for four years for the trading and clearing of over-the-counter futures and options contracts. The exchange hopes to launch an interest-rate swap denominated in Korean currency this year, he said.