According to the ASX, the clearing service enables clearing participants to offer a number of benefits to customers, including “greater certainty of moving positions and margin in the event of the default of the clearing participant”.
The ASX said it also minimises regulatory capital costs for customers, subject to new futures and OTC derivative regulations and reduces costs through enabling cross margining between interest rate futures and OTC interest rate swaps cleared through ASX.
ASX deputy chief executive Peter Hiom said the clearing solution was developed in conjunction with clearing participants and end clients to ensure the needs of Australian investors are met.
“By providing this solution locally, collateral is kept onshore and is subject to Australian law and regulation,” said Mr Hiom.
ASX general manager of clearing services Danielle Henderson congratulated Merrill Lynch on joining the service and said the ASX will work with clearing participants in coming months to on-board their clients.
“Our aim is also to continue to develop the service to offer additional enhancements that our customers value,” she said.
Peter Jaeger, Bank of Merrill Lynch America's head of APAC futures and options and OTC clearing, said the introduction of “position segregation and portability will boost investor protection and confidence in the Australian futures market”.
