Commerzbank Corporates & Markets' (C&M) market services team will now support client cross-product margining through Eurex Clearing Prisma 2.0.
Launched in response to the release of Eurex Clearing Prisma 2.0, the service aims to minimise collateral requirements by recognising and offsetting eligible positions, creating reductions in total margin payments due on both over-the-counter (OTC) and exchange-traded derivatives cleared at Eurex Clearing.
"Cross-margining solutions allow clients the potential to secure capital efficiences and it is likely to be a powerful driver of clearing flows and liquidity going forward as the OTC clearing market matures," said Nick Chaudhry, head of OTC clearing at Commerzbank C&M.
Eurex Clearing Prisma calculates combined risks across all markets for products that share similar risk characteristics within customer or proprietary positions according to liquidation groups, resulting in more accurate risk calculations.
Depending on individual portfolios, Eurex Clearing expects potential margin efficiencies of up to 70%.
“Our portfolio-based risk management methodology Eurex Clearing Prisma
“We are enabling our customers to cross-margin within listed asset classes and across OTC and listed-derivatives markets. Eurex Clearing Prisma incentivises holding balanced portfolios, which represent low risk and have lower capital and funding requirements thus creating a win-win situation for the markets we clear.”