Published On: Sun, Oct 27th, 2013

SGX Proposes Remote Membership for Clearing of US Customer Swaps

Magnus Bocker CEO of SGX

Magnus Bocker CEO of SGX

Singapore Exchange (SGX) is consulting the market on a new remote membership class, which will enable futures commission merchants registered with the US Commodity Futures Trading Commission (CFTC) to clear swaps for existing and new US customers through SGX’s derivatives clearing house, SGX Derivatives Clearing.

This follows regulatory changes in the US under the Dodd-Frank Act, which requires that US customers clearing swaps do so through a clearing house registered with the CFTC as a derivatives clearing organisation and through clearing members who are futures commission merchants.

SGX Derivatives Clearing has applied to the CFTC for registration as a derivatives clearing organisation and currently enjoys no-action relief for its clearing activities in the US pending registration. This new remote membership class further enables SGX Derivatives Clearing to admit futures commission merchants as clearing members and to clear swaps for these merchants’ customers.

While this proposal is initially aimed at meeting US regulatory requirements, SGX Derivatives Clearing may admit members of other jurisdictions as remote clearing members in the future.

In addition to the US regulatory application, SGX Derivatives Clearing and SGX’s securities depository, The Central Depository, have also applied under European regulations to conduct their clearing businesses in the EU.

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