Clearing and settlement of over-the-counter derivatives remained a hot topic at the Swiss Futures and Options Association’s 30th Burgenstock meeting last week, withseveral participants outlining a future with higher transaction costs but lower systemic risk as more and more OTC players move their business into arenas with central clearing.
Several exchange execs – including those from NYSE.Liffe, Eurex, and Nasdaq-OMX – made it clear they no longer believe that move will lead to a proliferation of new exchange-traded products that replace OTC instruments. Instead, it will reinforce the rise of clearinghouses – leaving established exchanges to expand their product base by moving into emerging markets.
As if to highlight that trend, a leader from the Mexican exchange MICEX announced it was contemplating the sale of an equity stake to CME Group, which already has a cross-holding in Brazil’s thriving BM&F BOVESPA. Spanish exchange MEFF has a stake the Mexican Derivatives Exchange (MexDer), leaving Argentina’s two futures exchanges – Buenos Aires’s Mercado a Termino de Buenos Aires and the Rosario Futures Exchange (ROFEX) – the only major Latin American players not affiliated with a big-brother exchange in the North.
