LCH Limited RepoClear: introduction of new fails fee

Dear LCH Limited RepoClear Clearing Member

In order to improve member settlement discipline, following industry focus on settlement efficiency and the request that CCPs take measures to reduce settlement failures, LCH Limited (“LCH”) would like to advise members of a new and additional fails fee that will be effective from 01 July 2021. The existing fixed fails fee for UK Gilt trades of £45 per intended settlement remains unchanged.

Operation of the new fails fee

The new fails fee has been purposefully designed to incentivise and drive improved consistency in settlement discipline over a monthly period.

If, in a calendar month in the UK Gilt market, a clearing member has:

• A nominal fail rate equal to or greater than 4%; and
• An average daily failed nominal equal to or greater than £100mn, then:

A fail fee of 0.05 basis points will be applied to the sum of the total nominal failed in that given month by the member. The fee does not relate to the underlying repo trade or term.

For the avoidance of doubt, the fee will only apply if the fails of the member in the UK Gilt market meet both thresholds (i) and (ii) above. The fee is calculated and charged on a monthly basis. Therefore, a member will therefore not be charged the fee if, in the preceding month, they do not meet thresholds (i) and (ii) in the UK Gilt market.

Members are able to access and view their settlement performance from the following RepoClear reports. The RepoClear Client Service team are available to help members navigate these reports.

Portal link: https://clearingservices.lchclearnet.com

For LCH LTD

For LCH LTD  - Sponsored Members

The new fee will be published on the LCH website on 01 July 2021 at the following link: https://www.lch.com/services/repoclear/repoclear-ltd/fees

For additional information or any questions, please contact: securitiesclientserviceLTD@lch.com