NYPC's Lukken: NYPC Open To Pursuing Strategic Relationships - Including Partnerships

By Christine Nielsen, JLN Interest Rates Editor

New York Portfolio Clearing (NYPC) will be open to pursuing strategic relationships - including partnerships - in the days ahead, according to Walt Lukken, chief executive officer of the NYPC.

Lukken commented on the plans of the NYPC - a new clearing joint venture with The Depository Trust & Clearing Corporation (DTCC) expected to begin operations on March 21st. - during a telephone press briefing held Wednesday.

On Wednesday, it was announced that NYSE Liffe U.S., the U.S. futures exchange of NYSE Euronext (NYX), would begin trading Eurodollar futures on March 21, and would launch 2-year, 5-year and 10-year U.S. Treasury futures along with U.S. Bond and Ultra Bond futures products on March 28,  subject to regulatory filings.  These products will be cleared through NYPC, which has received all the required approvals from the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC).

Regulators have already granted a reciprocal approval to the Fixed Income Clearing Corporation (FICC) allowing for the “one-pot” cross-margining arrangement with NYPC. The regulatory approvals would allow NYPC and FICC to proceed with a plan to offer “one-pot” margining for fixed income cash and futures positions, with the aim of reducing risk and delivering capital efficiencies to the markets.

Lukken assumed his position as CEO of the NYPC on May 1, 2010.  His charge was to lead NYPC's drive to be the first clearing organization to margin cash fixed income positions and their natural derivatives hedges together, in a way designed to substantially improve both operational and capital efficiency.