Buy-side chooses LCH.Clearnet ahead of US regulatory deadline

Over US$22 trillion notional cleared on SwapClear as participants benefit from proven risk management and access to industry’s deepest liquidity pool

5 March 2013

LCH.Clearnet Limited (LCH.Clearnet), the multi-national clearing house, today announced it has cleared over $22 trillion notional of interest rate derivatives through its SwapClear service for buy-side clients. Activity has intensified in the run up to the Dodd-Frank mandatory clearing deadline, which comes into effect on March 11.

February was a record month with 73 buy-side clients clearing 7,650 trades in 15 different currencies across a broad product set which includes forward rate agreements, amortizers and overnight index swaps, leveraging the benefits of SwapClear’s portfolio margining risk management approach and the resulting margin efficiency. SwapClear clears for an increasingly broad array of client types in the US and 17 other jurisdictions including asset managers, hedge funds and regional banks.

"We are pleased with the surge in buy-side activity, but more specifically we are encouraged by the volume of trades, as this is the real indication of the market’s readiness for central clearing,” said Daniel Maguire, Head of SwapClear in the US.

SwapClear, which already clears over 95% of the world’s cleared interest rate swaps, has invested heavily in the last three years so its risk, operations and technology architecture can accommodate the influx of buy-side activity and their clearing needs. In 2013 to date, an average of $2 trillion notional and 9,200 trades have been cleared daily on SwapClear by market participants.

SwapClear has over 14 years’ experience of clearing for the global IRS market. Today it clears the most comprehensive product range for buy-side clients and dealers and the total notional value of trades currently outstanding in SwapClear is more than $370 trillion, with an additional $174 trillion eliminated through multilateral trade compression.

In addition, SwapClear’s direct clearing membership, which now stands at 74, offers clients an unrivalled choice of executing brokers from across the globe in 17 currencies.

Editor’s notes:

Only the client side of each trade is included in the Client Clearing Volumes - i.e. the numbers do not double count the dealer side of the trades.

About LCH.Clearnet:

The LCH.Clearnet Group is a leading multi-asset class and multi-national clearing house, serving major exchanges and platforms as well as a range of OTC markets.

LCH.Clearnet’s world-class risk management framework provides the markets with exceptional levels of protection. Both the soundness of its risk management approach and the resilience of its systems have been proven in recent times. As demand for robust clearing services continues to grow, LCH.Clearnet is committed to setting and maintaining the highest standards across all asset classes cleared.

For more information on LCH.Clearnet visit www.lchclearnet.com/media_centre

Contact:

US - Nina Truman:         +1 212 513 5608
UK  - Rachael Harper:    +44 (0)20 7426 7175