State Street is launching a swaps clearing platform in the US that will allow parties trading in these derivatives to comply with the US Dodd-Frank Act, which is currently being implemented.
The regulation says the majority of swap contracts currently traded over-the-counter (OTC) must migrate to a centrally cleared environment and means parties wishing to trade swaps must work through an intermediary such as State Street.
Many asset servicing companies, such as State Street, believe derivatives clearing could become a valuable new revenue stream at a time when cost pressure is pushing down profits. Though State Street’s platform is only available in the US at the moment, European firms such as BNP Paribas Securities Services and others are offering derivatives clearing in Europe.
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