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Company Circular No:

LCH.Clearnet Ltd Circular No 3228

Service Circular No:RepoClear Circular No 196
Date:23 November 2012
To:All RepoClear Clearing Members


Fixed Income Default Fund Phase 2: Ballot process commencement

Following a ballot of Members in July 2012, LCH.Clearnet Limited (“LCH.Clearnet”) introduced a segregated RepoClear Default Fund as an initial step towards limiting the level of contagion to other LCH.Clearnet services in the case of an “in extremis” RepoClear Default.

In conjunction with a Design Group comprising of RepoClear members, LCH.Clearnet have been formulating additional  changes to further limit this contagion risk. In order to introduce these changes to the RepoClear Service, under the Clearing Membership Agreement, member approval in a ballot is required.

The specific proposal to be put to RepoClear Clearing members in the ballot is the introduction of a Service Closure phase for the RepoClear Service and, further to feedback from Members, to introduce an absolute cap to the size of the RepoClear Default Fund.

An information pack containing an Explanatory Statement (which describes the background, implementation and impact of the proposal) and a voting paper will be distributed on 23 November 2012 to RepoClear members who are eligible to vote in the ballot. The deadline for receipt of completed voting papers will be 19 Dec 2012.

If you have any additional questions about the voting process, timing or the changes being considered for the RepoClear Service by LCH.Clearnet, please e-mail RepoClear.Restrike@lchclearnet.com.