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Commerzbank launches margining service
13 June 2014
Provides cross-product margining through Eurex Clearing
Commerzbank Corporates & Markets' (C&M) market
services team will now support client cross-product margining
through Eurex Clearing Prisma 2.0.
Launched in response to the release of Eurex Clearing Prisma
2.0, the service aims to minimise collateral requirements by
recognising and offsetting eligible positions, creating
reductions in total margin payments due on both
over-the-counter (OTC) and exchange-traded derivatives cleared
at Eurex Clearing.
"Cross-margining solutions allow clients the potential to
secure capital efficiences and it is likely to be a powerful
driver of clearing flows and liquidity going forward as the OTC
clearing market matures," said Nick Chaudhry, head of OTC
clearing at Commerzbank C&M.
Eurex Clearing Prisma calculates combined risks across all
markets for products that share similar risk characteristics
within customer or proprietary positions according to
liquidation groups, resulting in more accurate risk
Depending on individual portfolios, Eurex Clearing expects
potential margin efficiencies of up to 70%.
"Our portfolio-based risk management methodology Eurex Clearing
Prisma [maintains] accurate counter cyclical margin levels,
while in parallel providing considerable capital efficiencies,"
said Thomas Laux, chief risk officer of Eurex Clearing.
"We are enabling our customers to cross-margin within listed
asset classes and across OTC and listed-derivatives markets.
Eurex Clearing Prisma incentivises holding balanced portfolios,
which represent low risk and have lower capital and funding
requirements thus creating a win-win situation for the markets