LCH.Clearnet SA successfully implements its new leading–edge clearing platform

Paris, 06 December 2010

LCH.Clearnet SA (LCH.Clearnet) has gone live with its new, enhanced cash equity clearing platform. This state-of-the art platform brings higher capacity, increased flexibility, and greater scalability and will leverage LCH.Clearnet’s capacity to develop innovative and timely solutions. In addition it was introduced with minimal impact to clients to ensure a quick and smooth transition and its implementation enabled the significant fee cuts which took place in January 2010.

The new platform has been designed to better serve clients and partners through:

• greater capacity and scalability, making it easier to increase the system’s capacity to connect new platforms more rapidly,
• an enhanced modular architecture enabling LCH.Clearnet to easily and rapidly respond to its clients and markets partners demand,
• economies of scale for exchanges with one platform serving multiple markets.

Commenting on this achievement, Christophe Hémon, Chief Executive, LCH.Clearnet SA said: “Our new platform drastically reduces our IT run costs and has supported the fee reductions implemented earlier this year, whilst enhancing LCH.Clearnet SA’s high quality clearing services with leading-edge technology. This is part of our on-going commitment to provide an even more competitive offering; a compelling combination of cost effective pricing, clearing expertise and time-to-market service.”

The platform replaces the former clearing system which had been used since January 2001. 

To view the press release as a pdf click here.

About LCH.Clearnet

LCH.Clearnet is the leading independent clearing house group, the world’s largest clearer of OTC derivatives and in addition serves major international exchanges and platforms.  It clears a broad range of asset classes including: securities, exchange traded derivatives, commodities, energy, freight, interest rate swaps, credit default 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.

A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade.  When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in.  By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within the market.

Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations.  The amount of margin is decided by the clearing house’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.