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Foreign Exchange

CME Group clears first FX NDF

CME Group has announced it has cleared its first customer over-the-counter (OTC) non-deliverable forward (NDF) FX trade.

It cleared the contract in the Brazilian real on April 30. The company also offers NDF clearing for the Chinese renminbi, Philippine peso, Malaysian ringgit, Indian rupee, Korean won, Taiwan dollar, Chilean peso, Peruvian sol, Russian rouble and Indonesian rupiah.

CME Group says it is working towards fully automated end-to-end FX clearing later this quarter with banks including Barclays, Citi, Credit Suisse, JPMorgan and Morgan Stanley.

The news comes as banks and their clients prepare to start clearing FX OTC derivatives trades under new regulations due to be implemented this year.

Last month, the IntercontinentalExchange, which trades the DXY US dollar index, will start offering clearing services for seven NDFs for client and clearing member trades in the second quarter of this year.

In Asia, the Singapore Exchange began clearing Asian NDFs in October, with Deutsche Bank, DBS Bank and OCBC Bank the first to clear these contracts on the exchange. SGX has not reported volume data on the use of its NDF clearing service.

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