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| Contact | Andrea Schlaepfer/ Rachael Harper, Corporate Communications |
| Tel: + 44 (0) 20 7426 7463/7175 | |
London, 02 February 2009
Following recent press speculation, LCH.Clearnet Group (LCH.Clearnet) confirms that it has received a preliminary approach about an offer for LCH.Clearnet from a consortium of banks and other financial institutions. At this time, LCH.Clearnet has not received any offer.
Further to the announcement on 22 October 2008 regarding LCH.Clearnet’s proposed merger with The Depository Trust & Clearing Corporation (DTCC), discussions and due diligence with DTCC continue.
Editors Notes
LCH.Clearnet is the leading independent central counterparty group (CCP) in Europe, 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.
As a CCP, LCH.Clearnet sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When the trade is registered with LCH.Clearnet, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, LCH.Clearnet steps in. By assuming the counterparty risk, LCH.Clearnet underpins many important financial markets, facilitating trading and increasing confidence within the market.
Initial and variation margin (or collateral) is collected from LCH.Clearnet members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by LCH.Clearnet’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.