Managing Risk in the FX market

Financial markets are currently undergoing a period of unprecedented regulatory reform. Since the Lehman Brothers collapse, market weaknesses have been under intense scrutiny from financial institutions and regulators alike.

A key area of proposed legislation is mandatory central clearing for some OTC derivative instruments, including foreign exchange.

At launch, ForexClear covered the most actively traded currencies in the NDF marketplace. Subsequent releases have expanded the product set to cover 95% of the NDF market and provide the continuous registration of trades.

In November 2013 Client Clearing was launched allowing clients to access ForexClear through Futures Commission Merchants, and following EMIR reauthorisation International Client Clearing also became available.

With members increasingly making use of EM NDF clearing at LCH, we introduced clearing for five G10 NDF currencies in November 2017.

Future releases will include a broader range of OTC foreign exchange products such as NDOs, FXOs, NDF crosses, Forwards and Swaps.

ForexClear has been designed to deliver the enhanced functionality and robustness the FX business needs in today's challenging regulatory and capital-intensive environment.

Key Benefits

  • Mitigation of counterparty credit risk - delivering improved operational efficiency

  • Multilateral risk netting - reduces portfolio exposure and ultimately lowers initial margin

  • Improved STP workflow management - resulting in reduced operating risks and costs

  • A unique LCH default management process - specialist member participation for efficient and orderly liquidation in which the defaulter pays

  • All the benefits of an OTC traded market - combined with the post-execution advantages of a cleared environment

  • A flexible and progressive service  - developed in partnership with our members to meet the demands of the market 

A complete, end-to-end clearing solution

With our extensive strategic partnerships and internal developments ForexClear has been designed to deliver a complete, actively managed ‘end-to-end' clearing service. From the point of execution and submission to the trade matcher, we offer an inclusive post-trade processing, collateral management and settlement solution.