Newedge’s entrance into this space significantly expands its existing activities and complements its leadership in global exchange-traded and cleared derivatives (ETDs).
Newedge’s IRS Clearing initiative is supported by a partnership with SG CIB and CACIB. SG CIB and CACIB will serve as Newedge’s cleared IRS contingent default managers. In addition, Newedge’s OTC IRS clearing platform will be accessible to SG CIB and CACIB’s customers seeking an OTC IRS clearing solution.
Newedge will be the first independent Futures Commission Merchant (FCM) to deliver the benefits of CCP clearing of OTC IRS to incumbents, new IRS liquidity providers and buy side clients. Specific benefits include reduced counterparty risk, default protection and capital efficiencies from cross-margining opportunities. The move follows regulatory changes to the $441* trillion IRS market where Dodd-Frank in the US and European Markets Infrastructure Regulations are paving the way for a shift in the bilateral OTC market towards increased central counterparty clearing (CCP), greater transparency and reduced counterparty risk for the benefit of end customers.
“Newedge is committed to extending our established listed derivatives clearing services to additional OTC asset classes, beginning with IRS”, said Newedge CEO Nicolas Breteau. “To fulfill this strategic objective, we are enhancing our multi-asset infrastructure, leveraging the support of our A+ rated shareholders and, working closely with regulators and CCPs. We continue to make a material contribution to shaping what is a dynamic market structure,” states Breteau.
“Our derivatives clients are a key focus for the bank and we are very pleased to support them with this major development, together with Newedge. This will allow them to fully comply with the new regulatory environment and to benefit from Newedge’s expertise in clearing,” said Dan Fields, Head of Global Markets at SG CIB.
“We are delighted to partner with Newedge in this important initiative which is helping our clients to benefit from, and adapt to, the regulatory market structure changes,” said Thomas Gadenne, Global Head of Fixed Income at CACIB.
In establishing this partnership, SG CIB and CACIB are confirming their commitment to provide the full set of services to their clients transacting in OTC markets. This partnership is due to go live in Q2 2012.
* Source Bank of International Settlements June 2011 statistics
Newedge (newedge.com), a 50/50 joint venture between Société Générale and Crédit Agricole CIB, is a major force in global multi-asset brokerage business, with a world-leading position in the execution and clearing of listed derivative products. With a presence in more than 20 locations in 16 countries, Newedge offers a full range of clearing and execution services covering options and futures contracts for financial products and commodities, as well as for money market instruments, bonds, FX, equities, and commodities on OTC markets. Newedge provides a range of value added services, including prime brokerage, asset financing, an electronic platform for trading and order routing, cross margining, and the centralized reporting of client portfolios. Newedge, which primarily serves institutional clients, provides access to more than 85 exchanges. Newedge's 3,000+ employees form a close-knit, multinational team that can innovatively respond to its clients in fast-moving markets.
About Societe Generale Corporate & Investment Banking
At the core of Societe Generale’s universal banking business model (sgcib.com), the Corporate & Investment Bank is a well-diversified and leading player with nearly 12,000 professionals present in 33 countries across Europe, the Americas and Asia-Pacific.
Standing by its clients across sectors, the Corporate & Investment Bank tailors solutions for them by capitalising on its worldwide expertise in investment banking, global finance, and global markets.
For Corporates, Financial Institutions and public sector: providing a global advisory approach (M&A, debt, equity transaction, capital structure, and asset & liability management), as well as quality capital raising solutions across the debt and equity spectrum, optimised financing and expert risk management responses notably in the realm of foreign exchange and rates derivatives.
For investors: offering reliable and sound investment opportunities and risk management solutions through its integrated global markets platform delivering seamless access to markets (equity, rates, credit, currencies, commodities and derivatives), as well as advice and solid financial engineering, quality of execution and forward looking research across asset classes.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole CIB (ca-cib.com) is the Corporate and Investment Banking arm of the Crédit Agricole Group, the world’s sixth-largest bank by total assets(The Banker, 2011, July). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking and international private banking. The bank provides support to clients in large international markets through its network with a presence in major countries in Europe, Americas, Asia and Middle East. Crédit Agricole CIB’s activities are organised around five divisions:
Coverage and Investment Banking uses the bank’s know-how to serve the global needs of large corporate and financial institution clients. In this connection, this division lines up a worldwide network of senior bankers dedicated to corporate and specialized structures. The commercial bank and the transaction bank complement the offer and are at the core of Crédit Agricole CIB’s commercial organisation. In addition to clients’ coverage, this division also handles global loan syndication which originates structures, distributes and trades Crédit Agricole CIB’s transactions on main global financial markets.
The Global Investment Banking encompasses all equity and long-term financing activities for corporate clients, including Mergers and Acquisitions advisory, Equity Capital Markets businesses, Strategic Equities and Structured Financial Solutions, and specialised sectorial teams, including the Telecom Finance activities.
The Structured Finance business, in which the bank has leading positions, involves originating, structuring and financing major export and investment operations often backed by assets as collateral (such as aircraft and rail, ships, real estate), along with complex and structured loans.
The Fixed Income Markets handles all the trading and sales activities for corporates, financial institutions and large issuers. Thanks to its network of trading rooms, Crédit Agricole CIB provides its clients with an access to liquidity in the main financial centres and offers them a wide range of products and services to address their specific needs. The trading and sales entities are supported by dedicated research units.
The bank’s offer in Equity Brokerage is organised around Crédit Agricole Cheuvreux in Europe and CLSA in Asia, each with leading positions. An alliance with the Chinese broker CITICS has been signed that will create a leading global brokerage firm with a unique opening into Asia. This coverage is rounded out by Crédit Agricole Securities (USA) Inc. and Newedge, a subsidiary jointly owned by Crédit Agricole CIB and Société Générale.
Kevin Russell: +44(0)207 676 8548, kevin.russell[.]newedge.com
John Parry: +44(0)1379 871423 jhparry[.]gmail.com
Bill Ferri, +1.212 754 5428, bferri[.]intermarket.com
Michael Gelormino, +1.212.909.4780, mgelormino[.]intermarket.com
Societe Generale Corporate & Investment Banking
Antoine Lheritier: +33 1 42 13 68 99, antoine.lheritier[.]sgcib.com
Ila Kotecha: +44 207 676 68 04, ila.kotecha[.]sgcib.com
Crédit Agricole Corporate and Investment Bank
Anne Robert : +33 1 41 89 03 77, anne.robert[.]ca-cib.com
Bertrand Hugonet: +33141 89 30 44, Bertrand.hugonet[.]ca-cib.com
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