On Monday May 17, 2021, TFX’s T-Clear FX went live, following a member certificate handover ceremony that was held on May 14, attended by representatives of four trading members. TFX 's T-Clear FX has been approved by the regulatory authority as a product that falls under market derivatives transactions.
A general convention for OTC FX has been that FX brokers use multiple financial institutions for their cover transactions and consolidate those transactions to specific firms of their choice called Prime Broker (PB). T-CLEAR FX was created by TFX to offer complementary and alternative services to PBs.
For cover transactions cleared at T-CLEAR FX, FX brokers and financial institutions in effect do not take any more credit risk by making TFX, an authorized clearinghouse, the counterparty of the transactions. T-CLEAR FX also helps block any potential chain-reaction of bankruptcies or systemic risk from occurring, which will help contribute to enhanced stability of the entire FX industry.
Transactions and open positions in the market have been growing steadily since day one, with further expansion expected. T-CLEAR FX is just the first release of the “T-CLEAR series”, with TFX aiming to utilize the CCP scheme to expand clearing services to cover a broad range of products.