Key information for London Stock Exchange Derivatives Market clearing members:
- Aggregation of client data into a single client account
- Different Member mnemonics on LCH Ltd and London Stock Exchange Derivatives Market reports
- Settlement process
- Reporting structure
- Different underlying product codes for SPAN and BCS report
Client data reporting
- All client data is aggregated into one single account for a GCM (general clearing member)
- There will be netting within the GCM's client account of the individual client account positions
- SPAN margin reports produced by LCH Ltd will not show individual client account margin data
- ECL reports will show the resultant open positions due for delivery
Different member mnemonics
- Member mnemonics used in BCS reporting are different to the member mnemonics used in LCH Ltd reports
- London Stock Exchange Derivatives Market Member codes, used in BCS reporting, are established at the point that the new member is set up on the exchange
- LCH Ltd Member codes, used in LCH Ltd reporting, are established at the point that the new member is approved by LCH Ltdor clearing
- A mapping table is maintained to ensure the London Stock Exchange Derivatives Market member codes are correctly linked to the LCH Ltd member codes
- From the close of business on exercise/expiry date until settlement, all London Stock Exchange Derivatives Market physically delivered underlyings become EquityClear contracts under the LCH Ltd Rules and Regulations.
- All London Stock Exchange Derivatives Market Clearing members need to be an EquityClear member or use the services of an EquityClear GCM.
- The trades are margined the morning following exercise/expiry using Equity Risk Analysis (ERA) as currently used by the EquityClear service.
- Margin offsets and optional cross trade source netting are available on London Stock Exchange Derivatives Market Delivery positions.*
*Please note that due to the interoperability arrangements in place for London Stock Exchange Derivatives Market Norwegian contracts, cross trade source netting is not currently available for these contracts.
- London Stock Exchange Derivatives Market reports will be available from BCS and will contain all Variation Margin, Options Premiums and Net Liquidating Value data
- LCH Ltd Banking, SPAN, and EquityClear reports will be available via the LCH Ltd Member Reporting Website.
- SPAN reports will contain Initial Margin data on London Stock Exchange Derivatives Market positions pre exercise/expiry.
- London Stock Exchange Derivatives Market delivery positions will be shown within the EquityClear reports and made available under the EquityClear folder within Member Reporting.
- LCH Ltd Banking reports will contain margin requirements.
- The codes used for securities on the London Stock Exchange Derivatives Market exchange are different to the codes used by LCH Ltd for margining
- BCS reports will display the London Stock Exchange Derivatives Market codes, SPAN reports will display the LCH Ltd codes
- SPAN is set-up to accommodate only 3 letter codes for the contracts, London Stock Exchange Derivatives Market codes have up to 6 characters
- The mapping of the London Stock Exchange Derivatives Market codes to the LCH Ltd codes will be available to Members in the margin rate circular on the LCH Ltd website
For members and clients wishing to find out more about the technology used by for clearing this market, please select the following link which will provide the technical documentation relating to the BCS clearing system, connectivity and user guides.