BNY Mellon has been selected by NASDAQ OMX, owner of the NASDAQ stock market and eight European stock exchanges, as one of its settlement banks for its central counterparty (CCP) clearing service in Europe.
The bank said that it will serve the needs of both the CCP and the buy-side clients, and support NASDAQ OMX’s settlements in US dollars, euros and sterling. As a result of new legislation including Dodd-Frank in the US and the European Market Infrastructure Regulation (EMIR) in Europe, many derivatives, credit default swaps (CDS) and interest rate swaps will migrate from trading over-the-counter (OTC) to through CCPs. BNY Mellon is working with clients and CCPs to ensure the efficient and timely processing of margin for these trades.
“BNY Mellon is a strong addition to our group of settlement banks which are providing clearing services on our European stock exchanges,” said Johan Rudén, newly appointed president of NASDAQ OMX Clearing AB. “This is central to our strategy of building a competitive model which will increase liquidity and lower costs for investors.”
Dominic Broom, head of Europe, the Middle East and Africa (EMEA) sales and relationship management, treasury services at BNY Mellon said: “The move to CCPs is a radical shift in the way the industry does business and we are at the forefront of this key regulatory change.
“In addition to providing settlement services for CCPs, we are also helping clients optimise and administer their collateral as part of the support we can offer them across the whole breadth of the investment lifecycle.”
NASDAQ OMX will implement its CCP clearing service with BNY Mellon in December 2013.
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