GFO-X is the UK’s first regulated and centrally cleared trading venue dedicated to digital asset derivatives.

The trading venue stated that it has been working closely with these partners to deliver the requirements necessary to grow the institutional digital asset index futures and options market. 

Read more: LCH SA to launch UK’s first centrally cleared trading venue for digital asset derivatives with GFO-X

“We are delighted to announce our strategic partners as we drive towards launch in Q1 next year. Their support is a clear and strong endorsement of our vision of the market structure required to deliver digital asset derivatives to large institutional clients,” said Arnab Sen, chief executive and co-founder at GFO-X.

“It demonstrates the need for a highly regulated venue to bring additional depth, breadth, and diversification to the current limited choices in centrally cleared digital asset index derivatives. We believe the digital asset derivatives market will grow exponentially over the coming years.”

GFO-X offers a trading platform built for institutions, providing investors with a secure and efficient trading environment to manage digital asset exposure.  

“As a market maker, our strategic connection with GFO-X underscores our commitment to the institutional digital asset futures and options market – a rapidly evolving space we believe holds significant potential for continued growth and opportunity,” said Osi Lilian, IMC Strategic Investments co-lead.

The venue added that it looks forward to announcing additional partnerships with leading financial institutions in the immediate future.

Read more: M&G Investments leads $30 million Series B funding round for GFO-X

“We are excited to partner with GFO-X, the UKs first regulated and centrally cleared trading venue dedicated to digital asset derivatives,” said Barry Polak, lead product commerce at ABN ARO Clearing.

“This strategic collaboration underscores our shared commitment to advancing the institutional digital asset futures and options market.”

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The new ESG clearing compass will consist of two services: the ESG Portfolio Assessment and the ESG Visibility Hub.

These new services come as part of Deutsche Börse’s intentions to support the sustainable transformation journey of clearing members and their clients by increasing transparency and awareness regarding cleared portfolios and counterparties.

“The clearing industry is at an early stage of the transformation journey. We highly appreciate the efforts of Eurex Clearing to enable its clients to have more data transparency and awareness of their ESG profile and strategy,” said Pauline Engelberts, global chief operations and chief sustainability officer, ABN AMRO Clearing N.V.

“This will pave the way for better climate metrics. We are happy to support this initiative.”

The ESG Portfolio Assessment service evaluates securities delivered as margin collateral and default fund contributions with a range of climate metrics and data.

The new data offering will be beneficial to clients looking to decarbonise their portfolios, improve their monitoring and reporting facilities or reconcile their ESG strategy.

Elsewhere, the ESG Visibility Hub will offer clearing members increased tools to highlight their ESG profile and initiatives on Eurex Clearing’s website.

Market participants will be able to use this information to assess counterparties that they do business with, based on their sustainability profile and ESG strategy.

“Many market participants still struggle with incomplete, inconsistent or insufficient data regarding their exposure to climate-related physical and transition risks,” said Christina Sell, chief sustainability officer, trading and clearing at Deutsche Börse.

“As a financial infrastructure service provider, we consider it our responsibility to contribute to transparency. With our innovative offering, our members can efficiently receive high-quality ESG data via established channels.”

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In a statement, ABN Amro said the client was trading US options and futures and could not meet the requirements due to ‘extreme stress and dislocation’ in US markets amid the ongoing coronavirus pandemic.

The bank confirmed its clearing arm, ABN Amro Clearing, was forced to close-out the client’s position to prevent further losses. It stated the pre-tax loss incurred stands at $250 million, with the net loss totalling $200 million, which would be included in ABN Amro’s first quarter earnings this year. The client involved was not identified.

Volatility across markets globally has persisted throughout the coronavirus outbreak despite intervention from central banks and efforts from governments to settle concerns of investors. ABN Amro’s confirmed loss is one of the largest the industry has seen to date related to the coronavirus pandemic.

Last week, US exchange operator CME confirmed that its clearing arm was forced to auction off portfolios belonging to Chicago-based proprietary trading firm Ronin Capital. Ronin Capital was unable to meet its margin requirements on its bond and futures trades.

ABN Amro revealed its net profit in the fourth quarter 2019 was down a significant 43% to €316 million. Chief executive, Kees van Dijkhuizen, said in a letter to investors that revenues were impacted by low interest rates and high loan impairments in specific sectors.  

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Eurex confirmed in a statement that Swiss Life Asset Managers is the first buy-side client to use the central counterparty’s ISA Direct model for over the counter (OTC) interest rate derivatives.

The ISA Direct model allows buy-side clients to have a direct and contractual relationship with the clearing house, while being direct counterparts with a clearing agent. The buy-side traditionally has indirect connections to clearing houses, using clearing brokers as intermediaries.

“By being able to directly connect to Eurex Clearing, our concerns about credit risk and the portability of our assets are much better addressed. The ISA Direct model alleviates many of our concerns and helps us to meet the regulatory requirement of central clearing,” Jan Grunow, head of operations at Swiss Life Asset Managers, commented.

Eurex currently offers the ISA Direct model for its interest rate swaps and repo transactions. The initiative was developed to address buy- and sell-side concerns around the costs of clearing and concentration of risk.

“We welcome Swiss Life on board and thank ABN AMRO Clearing for its continued support. It confirms the value proposition of the ISA Direct model and we look forward to working with market participants to accelerate the adoption of this innovative service,” said Philp Simons, head of fixed income, funding and financing sales at Eurex.

ABN AMRO Clearing added that the lower balance sheet impact involved with the ISA Direct initiative is a major advantage that allows for the expansion of central clearing services to well-established buy-side clients.

“We are delighted to partner with Swiss Life,” Alexander Jacobs, head of OTC clearing at ABN AMRO Clearing, commented. “We are committed to bringing innovative clearing services to our clients. The ISA Direct set up offers capital, operational and risk efficiencies for all parties including novel collateral management solutions.”

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ABN Amro Clearing Bank is to distribute Fidessa’s derivatives execution management system (EMS) in a bid to ready its clients for changes to risk management and reporting under MiFID II.

The addition of Fidessa’s EMS means ABN Amro’s clients will have access to more than 110 futures, options, equities and FX markets delivered out of 11 key locations globally.

The deal follows an established partnership between both firms after ABN AMRO replaced numerous in-house systems with Fidessa’s XTP Technology.

James Fairweather, global head of execution services at ABN Amro Clearing, explained the level of throughput alongside a flexible platform is hugely important to the firm and its clients.

“We were impressed by Fidessa’s intelligent F&O execution capabilities, including their algorithms, synthetic strategies and other smart order types,” he added.

Global head of derivatives at Fidessa, Justin Llewellyn-Jones, commented the firm is heavily vested in ensuring its clients are MiFID II ready.

“Along with our dedicated regulation practice that was established several years ago, we have invested over 10,000 man days of R&D this year alone in ensuring our solutions meet the regulation's requirements,” he said.

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