LCH.Clearnet to introduce SWIFT MX Standard messaging to improve collateral management efficiency

A market first to facilitate enhanced collateral straight through processing

17 September 2013

LCH.Clearnet Ltd and LCH.Clearnet LLC (LCH.Clearnet), the UK and US based subsidiaries of the world’s largest multi-national clearing house, are implementing SWIFT MX standard messaging for securities and cash collateral instructions provided to the clearing house by members.

The move eliminates the need for manual intervention, improving the efficiency of the collateral management process by allowing clearing members to provide instructions from their own systems. Clearing members are able to exchange automated, standardised information securely and reliably, with the potential for other CCPs to re-use the message types. In addition, members will benefit from increased transparency and straight-through processing within their middle and back offices.

Martin Ryan, Global Head of Operations at LCH.Clearnet, said: “Regulatory change, the mandatory clearing of OTC derivatives and the evolution of different asset protection and segregation models will soon require more collateral to move efficiently, from end users through the clearing members to CCPs. A cornerstone of LCH.Clearnet’s collateral services strategy is to leverage market infrastructure providers to provide efficient, scalable and standardised solutions throughout the complete end-to-end collateral processing chain. By introducing this innovative messaging interface with SWIFT, we are streamlining collateral processes for our clients and providing the scale and operational leverage for an increase in collateral velocity industry-wide.”

Arun Aggarwal, Head of UK, Ireland and Nordics, SWIFT, said: “The current emphasis on central clearing has changed the scope of the requirement for collateral messaging and created an opportunity for SWIFT to extend its solution to CCPs. We look forward to working with LCH.Clearnet to improve the speed, transparency and efficiency of collateral management activities for its customers.”

Contact: Kamyar Naficy +44 (0) 20 7426 3787  

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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 exceptional levels of protection to international markets, as has been proven through the management of recent defaults. As demand for robust clearing services continues to grow, LCH.Clearnet is committed to achieving the highest standards of risk management across all asset classes cleared.

LCH.Clearnet is majority owned by London Stock Exchange Group (LSE.L), a diversified international exchange group that sits at the heart of the world's financial community.

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