LCH.Clearnet launches clearing for Turquoise

17 November 2011

LCH.Clearnet Ltd (LCH.Clearnet), the leading independent clearing house, has launched interoperable clearing across 17 countries for Turquoise, the independent pan-European equity trading platform.

Turquoise was established in 2008 to engender greater competition in the secondary trading of European equities, and offers a combination of innovative services, superior technology and competitive pricing.

In 2003, LCH.Clearnet led the way with clearing house interoperability by successfully implementing and operating a clearing service for SIX Swiss Exchange Ltd (formerly virt-x) with SIX x-clear Ltd (formerly SIS x-clear).

Wayne Eagle, Executive Director Equity Services said: “The introduction of interoperable clearing for Turquoise is a truly positive development for the European Equities market. Choice of clearer allows customers to select the clearing house that best meets their requirements and results in lower costs and greater efficiencies. With EquityClear’s highly competitive pricing structure and robust risk management standards, we are confident that customers will recognise the benefits of choosing LCH.Clearnet.”

Adrian Farnham, CEO of Turquoise said: “We are pleased that LCH.Clearnet are part of this initial phase in building a fully interoperable clearing model, one which will allow members of Turquoise to decide which clearing house they want to use. We very much believe interoperability will help drive post trade efficiencies in the European cash equity market.”

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About LCH.Clearnet

The LCH.Clearnet Group is the leading independent clearing house group, 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, commodities, energy, freight, interest rate swaps, CDS 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.