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Company Circular No:

LCH.Clearnet Ltd Circular No 3145

Date:26 April 2012
To:All Clearing Members

Member Circular

The Rulebook of LCH.Clearnet Limited (“LCH.Clearnet”), a Recognised Clearing House regulated by the Financial Services Authority (“FSA”) and a Derivatives Clearing Organization registered with the Commodity Futures Trading Commission (“CFTC” or “Commission”), will be amended1 to reflect the changes introduced by LCH.Clearnet resulting from CFTC Regulations with effect from 7 May 2012.

LCH.Clearnet already requires all Clearing Members to provide periodic financial reports so that it can assess whether membership requirements are being met. With effect from 7 May 2012, Section 1.11.1 of the Procedures will be amended in order to make explicit that all Clearing Members are required to supply to LCH.Clearnet in a timely manner, information concerning any financial or business developments that may materially affect the Clearing Member’s ability to comply with the membership requirements.

Section 1.2.1 of the Procedures will require all Clearing Members to maintain written risk management policies and procedures that outline the risk that a Clearing Member poses to LCH.Clearnet. Members must, on request, provide to LCH.Clearnet such documents and information as to the liquidity of their financial resources and their settlement procedures (Section 1.11.1(b)(ii)). In addition, Section 1.11.1 will require that a Clearing Member may be required to provide such information to any of LCH.Clearnet’s regulators (including the Commission) upon LCH.Clearnet’s request.

Section 1.11.2 of the Procedures  will require Clearing Members regulated by the CFTC to provide to LCH.Clearnet copies of all reports that are required to be filed with the Commission  pursuant to CFTC Regulation Parts 17 and 20 (Large Trader Reports). LCH.Clearnet will use this information so that it can, when appropriate, take action to address any risks posed by such large trader.

Finally, Section 1.2.1 of the Procedures will be amended to reflect current practice that LCH.Clearnet may refuse an application for membership where it considers it appropriate to do so in accordance with its internal risk management policies and procedures.

The changes to the Rules and Regulations of LCH.Clearnet will take effect on 7 May 2012.

Clearing Members are encouraged to make themselves familiar with the rule amendments coming into effect on 7 May 2012. The changes can be found under Rule changes to Section 1.

Clearing Members are encouraged to make themselves familiar with the rule amendments coming into effect on 7 May 2012.

Any questions concerning this Member Circular should be directed to the Membership Team at LCH.Clearnet

Tel +44 207 426 7949

E-mail membership@lchclearnet.com

1 Subject to final regulatory approval