International Derivatives Clearing Group, LLC (IDCG) operates, through its subsidiary International Derivatives Clearinghouse (IDCH), LLC, a central counterparty clearinghouse which provides an efficient and transparent platform to clear and settle over the counter interest rate derivatives.
IDCG was founded in 2007 and received it Derivatives Clearing Organization (DCO) designation from the CFTC in 2008. IDCG has been offering to clear interest rate derivative contracts between broker/dealers and customers since December of 2008. Members and their clients use IDCG's clearinghouse in order to mitigate the counterparty credit risk commonly associated with over the counter interest rate derivatives and take advantage of the operational efficiencies offered by a central counterparty.
IDCG utilizes the agent model for clearing, with its members being CFTC recognized Future Commission Merchants (FCMs). The agent model offers clients a solution with well understood and tested regulatory policies and enables client margins to be held in bankruptcy remote segregated accounts with pre and post default portability. IDCG's nimble organizational structure and focus on the interest rate derivative market enables it to deliver a rich suite of products to meet the current and future needs of its members. IDCG continues to evolve with the changing regulatory landscape while maintaining its commitment to openness and transparency in the over the counter derivative marketplace.
Members of the International Derivatives Clearinghouse are able to clear and settle new and existing OTC interest rate swaps through a CFTC regulated Derivatives Clearing Organization. Swaps are cleared on an agent basis by Clearing Members of IDCH. Clearing members clear both house and client business after execution has taken place.
The International Derivatives Clearinghouse offers market participants the ability to maintain their current execution relationships, but utilize the benefits of central clearing. Post execution, the swaps are novated to IDCH through market standard affirmation platforms and upon acceptance of the transaction, IDCH steps in as the central counterparty to the transaction.
IDCG currently offers Clearing Members and their clients the ability to clear OTC swaps. Please contact IDCG with any questions.
Benefits of Central Clearing
- Distributed risk through a central clearing agent
- Client margin housed in bankruptcy remote accounts
- Pre and Post Default portability of margin
- Increased available credit
- Increased transparency
- Lower systemic risk
- Uniform risk standards and protocols