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LCH.Clearnet SA launches clearing for Inter Dealer Broker cash bond trades

London, 18 December 2007

LCH.Clearnet SA is pleased to announce the launch of a new initiative allowing Clearing Members to route French cash bond trades executed on a matched principal basis with an Inter Dealer Broker (IDB) to LCH.Clearnet SA for clearing.

The new service will be launched on 2 January 2008, and will be available for French Government cash bond trades only.

The launch of the new clearing service will allow clearing members to decrease their risk exposure and to increase the netting efficiency of their operations routed from other electronic trading platforms. The Clearing Members clearing activity resulting from operations on both ATSs and IDBs will be fully fungible at the clearing level and will result in a single netted settlement obligation, per ISIN, per business day, being generated.

There are no new development requirements and no reporting changes for LCH.Clearnet SA Clearing Members.

The new clearing service has been developed initially to cover French debt. Depending on the degree of appetite shown, the service will be later extended to encompass other debt currently cleared by LCH.Clearnet SA.

The French regulatory authorities have fully approved the service extension, with IDB trades being recognised as a new form of LCH.Clearnet SA Designated Gateway. Tradition London Clearing will be the first Designated Gateway for the service.

In order to take advantage of the service, participant companies should be existing  IDB clients, equipped with ICMA’s TRAX2 matching system and also should be registered as Clearing Members with LCH.Clearnet SA.

Christophe Hémon, Chief Executive at LCH.Clearnet SA, said: “LCH.Clearnet SA is very pleased to announce this extension to its French debt clearing services. The inter dealer broking community is a key participant in financial markets, and it is important that LCH.Clearnet should provide our customers with the security and efficiency of the central counterparty environment with its attendant netting benefits from a range of trading and matching platforms. We look forward to further extending the service to other government bonds and trading venues in due course.”

Patrice Brault, Chief Executive of Tradition London Clearing, added: “Tradition is pleased to be appointed, through its subsidiary Tradition London Clearing, as the first Designated Gateway under the new IDB service designed by LCH Clearnet SA. Tradition believes that clients will see clear benefits in the proposed extension of CCP services to broker-driven OTC markets.”

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About LCH.Clearnet

LCH.Clearnet is currently owned 67.6% by users, 17.8% by exchanges with the balance of 14.6% being held by Euroclear. Upon completion of the Euronext share buy-back programme by 2009, the Group will be owned 73.3% by users, 10.9% by exchanges and 15.8% by Euroclear.

LCH.Clearnet is committed to operating under strict principles of non-discrimination across its user base. LCH.Clearnet serves major international exchanges and platforms, equity, exchange-traded derivatives, energy, interbank interest rate swaps markets and the majority of the Euro-denominated and sterling bond and repo markets.

About Tradition

With a presence in 24 countries Compagnie Financière Tradition ("Tradition") is one of the world's leading interdealer brokers (IDB).  The Group provides broking services for a complete range of financial products (money market products, bonds, interest rate, currency and credit derivatives, equities, equity derivatives, interest rate futures and index futures) and commodity-related products (precious metals, energy and environmental products).  Tradition is listed on the SWX Swiss Exchange (CFT).

Tradition London Clearing is a subsidiary of Tradition, dedicated to clearing and settlement of securities. For more information, please visit www.traditiongroup.com or email [email protected]