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Shareholder vote overwhelmingly approves LCH.Clearnet’s €333 million share redemption

London, 15 October 2009

At the Company’s Annual General Meeting yesterday, shareholders of LCH.Clearnet, the leading independent central counterparty group, voted overwhelmingly in favour of approving the proposed voluntary redemption of up to 33,300,000 shares at a price of €10 a share as announced on 29 September 2009, with over 97% of votes cast in favour of the transaction.

Subject to the satisfaction of the remaining conditions the proposed voluntary redemption is expected to take place on 5 November 2009, with settlement of cash consideration within 14 days thereafter.

A. Chris Tupker, Chairman, LCH.Clearnet commented:

"We are pleased the proposed redemption has been approved by our shareholders. We believe that the implementation of the redemption will place the company on a strong footing for the future.  A further alignment of users and owners should enable us to respond better to new clearing opportunities and make it easier to counter competitive pressures by reducing fees.”

To view the press release as a pdf please click here.


About LCH.Clearnet

LCH.Clearnet is the leading independent clearing house group, serving major international exchanges and platforms, as well as a range of OTC markets.  It clears a broad range of asset classes including: securities, exchange traded derivatives, energy, freight, interbank interest rate swaps and euro and sterling denominated bonds and repos; and  works closely with market participants and exchanges to identify and develop clearing services for new asset classes.

A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade.  When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in.  By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within the market.

Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations.  The amount of margin is decided by the clearing house’s highly experienced risk management teams, who assess a member’s positions and market risk on a daily basis.  Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times.

LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.