Membership-SA: Legal and Regulatory Requirements

Membership-SA: Legal Requirements

The membership criteria applicable to the Clearing Members are set out in the following provisions of the Clearing Rules available here (for the CDS Clearing Rule Book, please click on the link entitled "Over-the-counter Credit Default Swaps"):

https://www.lch.com/resources/rules-and-regulations/sa-rulebooks.

With regards to EquityClear, CommodityClear and RepoClear, you may refer to the Title II of the Rule Book.

With regards to €GCPlus, you may refer to the Title V of the Rule Book.

With regards to CDSClear, you may refer to the Chapters 1 and 2 of Title II of the CDS Clearing Rule Book.

Membership-SA: Capital Requirements

The terms used in the table below are defined in the Clearing Rules as follows:

Individual Clearing Member (ICM):

(i) For Securities and Derivatives Products Groups or for Baskets, as set-out in an Instruction, a Clearing Member authorised to clear Transactions dealt for its own account, or allocated to it or which have been concluded for the account of its Non Trading Members; (ii) for Fixed Income Securities Product Group, as set-out in an Instruction, a Clearing Member authorised to clear Transactions dealt for its own account exclusively.

General Clearing Member (GCM):

(i) For Securities and Derivatives Products Groups, as set-out in an Instruction, a Clearing Member authorised to clear Transactions which have been dealt for its own account, or have been concluded for the account of its Non Trading Members and/or Trading Members; and (ii) for Fixed Income Securities and Basket Product Group, as set-out in an Instruction, a General Clearing Member is a Clearing Member authorised to clear the Transactions which have been dealt for its own account or for the account of its Associated Trading Members.

For the CDSClear Clearing Service, the capital requirement will depend on whether the CDS Clearing Member is registered as a Futures Commission Merchant (FCM) with the U.S Commodity Futures Trading Commission and is a member in good standing of the U.S National Futures Association.

 

  Individual Clearing Member             General Clearing Member
EquityClear and CommodityClear (Cash and Derivatives markets)                     €10 million
               or
               €5 million + Letter of Credit

at all times: at least €25 million (or €15 million + a Letter of Credit);
or €30 million from the tenth Trading Member Cleared/Market Member;
or €33.75 million from the fifteenth Trading Member Cleared/Market Member;
or €37.5 million from the twentieth Trading Member Cleared/Market Member

 

RepoClear (excluding €GCPlus) €100 million (a Letter of Credit may be accepted up to a maximum amount of 50% of this amount)

 

€400 million (a Letter of Credit may be accepted up to a maximum of 50% of this amount)

 

€GCPlus €100 million (a Letter of Credit may be accepted up to a maximum amount of 50% of this amount)

€400 million (a Letter of Credit may be accepted up to a maximum of 50% of this amount)

CDSClear                                                                     Non-FCM                                                                                     FCM
 

                                   

€37million                                                                                   $50 million