"By offering flexibility in clearing organizations to our customers, OneChicago will enable firms to incorporate single stock futures and narrow-based indices more easily into their existing business processes," said William J. Rainer, Chairman and Chief Executive Officer of OneChicago. "We are pleased to partner with the OCC and CME to facilitate the clearing and settlement process for these new products."
Under the agreements, OCC will function as OneChicago's principal clearinghouse. OCC members will be able to reduce costs by cross-margining their security futures positions against offsetting options positions.
Non-OCC members that are clearing members of CME's Clearing House may clear security futures products at CME without establishing a direct relationship with OCC. This reduces the overhead necessary for those firms to offer security futures to their customers. Joint OCC/CME member firms may choose to clear trades at OneChicago through either OCC or CME for the first year of trading, after which they must clear though OCC. CME's wholly owned Clearing House is a division of CME.
Wayne Luthringshausen, OCC Chairman and CEO, said, "Our commitment to security futures continues to grow. We are looking forward to working with OneChicago and leveraging our experience in clearing equity derivatives to help make this product a success."
Phupinder Gill, President of the CME Clearing House Division, said, "We are pleased to offer clearing services for security futures products to our member firms through this arrangement. We believe OneChicago has the best market model for security futures, and stand ready to facilitate the efficient operations of its market."
OneChicago, LLC, is the joint venture created to trade single stock futures and narrow-based stock indices by Chicago Mercantile Exchange Inc. (CME), Chicago Board Options Exchange® (CBOE®), and Chicago Board of Trade (CBOT®).
OCC, founded in 1973, is the largest clearing organization in the world for options and was the first clearing house to receive a 'AAA' credit rating from Standard & Poor's Corporation. OCC's average daily volume is 3.2 million contracts and average daily premium settlements are $1.05 billion. As of first quarter 2002, total collateral value at OCC was in excess of $43.8 billion. Operating under the jurisdiction of the Securities and Exchange Commission and the Commodity Futures Trading Commission, OCC is jointly owned by the American Stock Exchange, Chicago Board Options Exchange, International Securities Exchange, Pacific Exchange and Philadelphia Stock Exchange. More information about OCC is available through its Web site at www.optionsclearing.com
CME's wholly owned Clearing House clears, settles, nets and guarantees performance of all matched transactions executed on the exchange. In 2001, the underlying value of CME's trading volume totaled $293.9 trillion, with 411.7 million contracts traded. On average, CME processes nearly 420,000 clearing trade transactions per day, moves about $1.5 billion per day in settlement payments and manages $28.2 billion in collateral deposits. CME is the largest futures exchange in the United States. More information about CME and its Clearing House is available at www.cme.com.
