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CME Group was asked by clients in December of last year to deliver a compression service for clearing OTC FX Non-Deliverable Forwards (NDFs). In response, the exchange has made tremendous strides to accommodate the demand of its users, by creating a tool called FX blending.

Regulations around the world, pertaining to global derivatives have increased the focus of financial institutions on maintaining capital margin requirements. While NDFs are not technically required to be cleared by the global regulatory confinements, there is still a considerable impact on them, thereby providing incentive and advantages for those who do clear NDFs.

The advantages brought forth ... (read more)