Clarus Financial Technology

What is Left Uncleared in 2018?

Uncleared Markets

The death of uncleared trading has been somewhat over-reported. We are certainly guilty of it ourselves on this blog, with a natural focus on Clearing. From a data perspective, transparency is certainly better for Cleared volumes because we can access volume data directly from the CCPs themselves – see CCPView.

However, as I explored the SDR data recently, I realised that we still have a vast treasure trove of data that we largely ignore. So here is a quick run-down of the areas of the market that remain uncleared.

Interest Rate Derivatives

Vanilla IRS

In Rates, almost all OIS and vanilla IRS across most of the 42 currencies are now reported as cleared:


Vanilla OIS

OIS clearing was probably not as mature as IRS clearing before the advent of the Uncleared Margin Rules. However, from a slow start we saw a big move to clearing. How much now remains uncleared?


So we have a running total of $400bn per month in vanilla products that remains uncleared (at the point of trade reporting). That’s a big market!


Sticking with vanilla products, let’s take a look at single currency basis swaps.

Our running total of uncleared volumes now stands at $425bn – and that is just for (broadly) clearable products!


Now we start looking into products that are not necessarily eligible for clearing. They certainly don’t have any clearing mandates!

Our running total hits $437.5bn…

Cross Currency Swaps

Of course, I had to mention Cross Currency! I like to think of it as the “largest uncleared market in the world” (excluding FX spot and forwards). Am I right?

Rounding up, let’s say that Cross Currency Swaps take us to a nice round $1trn per month of uncleared volumes. Wow. And Cross Currency makes up over half of that total.

What else could compete?


A market where volumes have been increasing recently….

A new running total of $2.5trn per month!

Okay, so LCH SwapClear just announced that they cleared $1,000trn ($1 Quadrillion) this year, but I still don’t think a market of $2.5trn per month should be sniffed at – or forgotten about!


FX Options

Secondly, we should also consider other asset classes. Whilst we know that physical FX remains uncleared, we have seen a sizeable shift toward clearing in NDFs. However, FX Options remain uncleared. How big is this market as reported by US Persons to SDRs?


So across Rates and FX we are now at a monthly total of $4.0trn per month! Plus one more significant volume maker…


I found the below total volumes surprising. Although I did have to select 380 currency pairs to get the data!


Rounding up, I therefore make our running total $5.5trn per month in uncleared Rates and FX products.

In Summary

The ESRB recently looked at Trade Repository data. They performed a very high level analysis of the data, and found that only around 50% of all Interest Rate derivatives were cleared in Europe. That is a good headline to lead with, but I do think it is performed at too high a level.

Nonetheless, I have repeated their same analysis but for US data:



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