International Derivatives Clearing Group, LLC

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International Derivatives Clearing Group
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Founded 2007
Headquarters New York
Key People Founder and Chairman of the Board, Vincent Viola;Chief Executive Officer, Garry N. O’Connor
Products Central Clearing for Interest Rate Derivatives
Twitter @IDCG_Clearing
Website www.idcg.com

International Derivatives Clearing Group (IDCG) offers a central clearinghouse for over-the-counter (OTC) interest rate swaps (IRS) in a regulated futures environment. IDCG is owned by LCH.Clearnet Group Limited, who acquired the company from The NASDAQ OMX Group, Inc. and other investors in August 2012. IDCG was subsequently renamed LCH.Clearnet (US) LLC.[1] [2][3]

IDCG's subsidiary, International Derivatives Clearinghouse (IDCH), is a CFTC-regulated derivatives clearing organization that provides a transparent forum to clear and settle Interest Rate Derivatives. IDCH uses the Exchange of Futures for Swaps (EFS) function to convert OTC derivative contracts into economically equivalent futures contracts. IDCG claims that by utilizing the EFS process, IDCG is able to provide customers the benefits of central clearing while maintaining the principles and economics of the OTC market.[4]

The NASDAQ OMX Futures Exchange (NFX), a wholly owned subsidiary of NASDAQ OMX, is the designated contract market listing the futures contracts cleared by IDCH.

The NFX platform utilizes NASDAQ OMX Click XT matching technology and the IDCH platform is built on a combination of NASDAQ OMX SECUR clearing technology and Razor Risk technology. Together, IDCG and NFX plan to launch additional IRS products, reducing systemic risk in the OTC markets.

History

US Dollar Interest Rate Swap vs. 1 Month Floating Rate
US Dollar Forward Start Interest Rate Swap vs. 1 Month Floating Rate
US Dollar Overnight Index Swap
US Dollar 1 Month Forward Rate Agreement (FRA)
US Dollar 3 Month Forward Rate Agreement (FRA)[6]

Products and Services

IDCG’s centrally cleared IRS futures contracts are economically equivalent to plain vanilla IRS contracts traded in the OTC market. Currently IDCG is able to clear spot, aged, and forward starting US Dolllar denominated plain vanilla interest rate swaps out to a 30 year maturity. Customers are able to trade these contracts bilaterally in the OTC market and then give up the trade to IDCH through a Web portal known as SwapDrop.com.

On Apr. 28, 2010, IDCG announced that it would clear the following over-the-counter (OTC) interest rate derivative products through its clearinghouse: US Dollar Interest Rate Swap vs. 1 Month Floating Rate, US Dollar Forward Start Interest Rate Swap vs. 1 Month Floating Rate, US Dollar Overnight Index Swap (OIS), US Dollar 1 Month Forward Rate Agreement (FRA) and US Dollar 3 Month Forward Rate Agreement (FRA).

Key People

Resources

References

  1. LCH.Clearnet Group Acquires IDCG. LCH.Clearnet Group.
  2. About ICDG. IDCG.
  3. International Derivatives Clearing Group LLC. LinkedIn.
  4. Services. IDCG.
  5. IDCG Announces Appointment of Garry N. O’Connor as CEO of IDCG. IDCG.
  6. [http://idcg.com/pdfs/idcg_news/IDCG%20New%20Product%20Press%20Release.pdf IDCG Announces New Products Eligible for Clearing NEW]. IDCG.
  7. IDCG Announces State Street Global Markets to become New IDCG Clearinghouse Member. IDCG.
  8. IDCG Platform Enhancements‐June 2011. IDCG.