For those of you wondering whatever happened to the old Board of Trade Clearing Company (BOTCC), it is alive and well—though perhaps a shell of its former self—and looking to play a bigger role in the expected move towards cleared over-the-counter products.
The Clearing Corporation (TCC) as it is now known has had several initiatives since the Chicago Board of Trade moved its clearing to the Chicago Mercantile Exchange clearinghouse but none of them has brought the clearinghouse back to its former glory.
Today the TCC announced that they have entered into an agreement to provide clearing and settlement services for derivatives products traded on the new Financial and Energy Exchange (FEX) for Asian based derivatives products. FEX is based in Sydney Australia and from what we can tell from a quick Internet search, focuses on environmental markets. FEX is scheduled to launch its derivativers market in 2008.
While not earth shattering news, this is interesting in that several of the top guys at numerous Futures Commission Merchants (FCMs) hinted to Futures when interviewed for our Top 50 Brokers annual feature to watch this space, meaning the TCC.
TCC is still owned mainly by the large investment banks that are still smarting from losing the huge CBOT business and fresh from another defeat at the hands of the Chicago futures exchanges. TCC’s owners were the largest cheerleaders for the Intercontinental Exchange’s bid for the CBOT.
One thing the industry seems to agree on is that the huge over-the-counter credit derivatives market will be moving to a cleared environment, though not necessarily a listed one. TCC is angling to be a player and who knows, they can’t lose em all.
