International Derivatives Clearing Group, LLC

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International Derivatives Clearing Group
Logo-1-.jpg
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), operating under the name LCH.Clearnet LLC, was cited as a dormant derivatives clearing organization by the U.S. Commodity Futures Trading Commission in May 2019.[1]

Background

International Derivatives Clearing Group (IDCG) offered clearing for over-the-counter (OTC) interest rate swaps built out of futures positions that in total replicated the swap contract.

IDCG was owned by LCH.Clearnet Group Limited, which acquired the company from The NASDAQ OMX Group, Inc., former NYMEX president Bo Collins and other investors in August 2012. IDCG was subsequently renamed LCH.Clearnet LLC.[2] [3][4]

IDCG's subsidiary, International Derivatives Clearinghouse (IDCH), was a CFTC-regulated derivatives clearing organization for clearing and interest rate derivatives. IDCH used the exchange of futures for swaps (EFS) function to convert OTC derivative contracts into economically equivalent futures contracts. IDCG claimed that by utilizing the EFS process, IDCG could provide customers the benefits of central clearing while maintaining the principles and economics of the OTC market.[5]

The NASDAQ OMX Futures Exchange (NFX), a wholly owned subsidiary of NASDAQ OMX, listed the futures contracts cleared by IDCH. The IDCH platform was built on a combination of NASDAQ OMX SECUR clearing technology and Razor Risk technology.

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)[7]

  • September 2010 -- State Street Global Markets becomes IDCG Clearinghouse (IDCH) member.[8]
  • June 2011 -- IDCG enhances clearing platform[9]
  • August 2012 -- IDCG acquired by LCH.Clearnet Group Limited; IDCG renamed LCH.Clearnet LLC
  • January 2013 -- LCH.Clearnet LLC approved to clear swaps qua swaps

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