Exchanges

ErisX obtains derivatives clearing license from CFTC

July 1, 2019, 5:56PM EDT

ErisX obtained a derivatives clearing organization license (DCO) today, allowing the exchange's upcoming clearinghouse to clear digital asset futures contracts, according to a statement from the company. Those contracts will be traded on its derivatives market, which is also slated for launch later this year.

The Commodity Futures Trading Commission (CFTC), which regulates futures markets in the states, granted the DCO license under the Commodity Exchange Act (CEA). The planned clearinghouse will comply with the CEA's 17 core principles, which include risk management mechanisms among other procedures for member and fund protection.

Thomas Chippas, Chief Executive Officer of ErisX, said the exchange separated trading and settlement by having both traditional DCM, or exchange, as well as DCO, or clearing model. This structure could widen the customer base since it's a model used in other asset classes, according to Chippas.

“This reflects the structure that institutional investors expect from other asset classes and will help drive these markets toward greater relevance and accessibility," he said.

As of now, Chippas said spot volumes are building. He also told The Block that the company has lined up several "large" intermediaries partners, namely TDAmeritrade, Trade Station and Fidelity. 

The company obtained its DCO license after LedgerX snagged a DCM license last week, bolstering its efforts to also deliver a futures market to the U.S. With ErisX' new DCO license, both companies now have DCM and DCO licenses in preparation for their coming futures ventures.  

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