The Australian Securities Exchange has launched the ASX Equity FlexClear, a service that allows institutional investors to centrally clear over-the-counter (OTC) equity options transactions.
ASX has partnered with SunGard to enhance its clearing capabilities and prepare for further ASIC regulation, a SunGard-issued statement said.
ASX Equity FlexClear helps reduce the regulatory costs of OTC transactions and improves capital efficiency by providing margin offsets between OTC portfolios and ASX equity derivative contracts, a statement issued by the ASX said.
ASX deputy chief executive Peter Hiom said: “ASX Equity FlexClear will bring the substantial operational, netting and collateral efficiencies to the Australian OTC derivatives market.”
“This is the latest addition to ASX’s range of world-class exchange-traded and OTC clearing services.”
The benefits to investors include choice and flexibility, anonymity, reduced counterparty risk, improved valuation quality, and liquidity, the ASX statement said.
ASX manager of equity derivatives sales Graham O’Brien said: “SunGard’s proven global experience has helped ASX offer a compelling solution to the new regulatory challenges faced by our equity options participants.”
SunGard managing director for Australia and New Zealand, Ashley Crawford, said exchanges need services that improve margins and ease administration.
“Equity FlexClear will help ASX meet those challenges and we are pleased that they can now adapt to the new environment to help accelerate their business growth with this solution,” Mr Crawford said.
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