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Company Circular No:LCH.Clearnet Ltd Circular No 3279
Service Circular NoLCH SwapClear No 082
Date:27 March 2013
To:All LCH SwapClear, ForexClear and EnClear Members

Requirement for FCMs to Email Account Debit Instructions

Further to the member circular 3220 of November 5, 2012, LCH.Clearnet Limited (LCH.Clearnet) is writing to provide further guidance for FCM Clearing Members as part of its continued implementation of Part 22 of the CFTC’s regulations (LSOC), which are currently effective.

LCH.Clearnet is introducing a standardized email process that allows FCMs to notify LCH.Clearnet that a debit of the FCM’s cleared swaps customer account intraday will not cause a breach of compliance with Part 22.

Intraday Margin Settlement

As part of LCH.Clearnet’s intraday margin settlement process, FCMs are given the option to meet calls via the delivery of securities or PPS debit. If PPS debit is chosen, FCMs are afforded the opportunity to ensure compliance with Part 22 prior to having their account debited by LCH. The authorization that permits LCH.Clearnet to debit the account of an FCM is currently permitted via phone or email. As of Thursday, March 28, 2013, FCM authorization must include the following standard email:

The following authorization is in reference to:

FCM Mnemonic:[ABC]
Sub Account:[C]

Following LCH.Clearnet Limited’s intraday margin call, this email constitutes notification to LCH.Clearnet Limited that we have completed all necessary FCM compliance calculations as required by applicable regulation and that funds should be debited from our nominated account in satisfaction of that margin call. We acknowledge that nothing herein shall affect our rights and obligations with respect to the delivery of collateral or otherwise, which remain governed by the LCH.Clearnet Limited rulebook and associated procedures.

No other changes are being implemented at this time.

If you have any questions in the interim, please do not hesitate to contact LCHOperations-Treasury@lchclearnet.com, or by telephone at +44 20 7426 7505.