Changes to CDR/LDR/Accommodation Charges
LCH Circular No 3683
14th December 2015
LCH.Clearnet Limited (LCH) would like to inform you of the following changes to LDR/CDR and accommodation charges.
Currently there are three different rates with which Clearing Members accrue interest against cash balances held with LCH, namely:
- Client Deposit Rate (CDR)
Applicable to EUR, GBP, USD cash balances held on SwapClear client accounts
- RepoClear Deposit Rate (RDR)
Applicable to EUR, GBP, USD cash balances held on RepoClear accounts
- London Deposit Rate (LDR)
Applicable to all other Clearing Service cash balances (Default Fund excluded)
In line with existing fee tariff’s LCH applies a 10 basis point charge against all non-cash collateral used to cover Initial Margin - this is known as ‘accommodation charge’. Please note that accommodation charge will continue to only be charged against utilised non-cash collateral.
From the 15/01/2016 the spread element of the CDR and LDR rates and the accommodation charge will be reviewed by an LCH committee and will be subject to change, reflecting market conditions. For RepoClear accounts, the process for RDR currencies (EUR, GBP, USD) remains unchanged.
As per the timeline in the linke below, LDR and accommodation charge will be reviewed monthly on the 15th (or preceding 1business day). Any LDR change would then be applied on the fifth business day following the review with any change to the accommodation charge applied on the 13th business day following the review.
CDR will be reviewed quarterly and any changes applied on the 13th business day following the review.
LCH will notify members of the outcome from the monthly/quarterly review by member circular sent on the third business day following the review.
Please note these changes are independent of those related to the Collateral Fee Billing Changes. A further update on this initiative will follow shortly.
If you require any further information or have any questions please contact:
Collateral Client Services
Operations and Client Service Manager
1All business days referenced are LCH business days