Resizing of LCH.Clearnet's Commodities Default Fund as part of the LME Clearing Service Migration

Report date

Company Circular No:

LCH.Clearnet Circular Number: 3514


11 September 2014


To all LME, EnClear, and Nodal clearing members


As members will be aware, London Metal Exchange (LME) market is moving clearing from LCH.Clearnet Ltd (LCH.Clearnet) to LME Clear. This will take effect on September 22, 2014.  

It should be noted that this migration will have an impact on LME clearing members' contributions to LCH.Clearnet's commodities default fund.  

LCH.Clearnet's commodities default fund comprises default fund contributions for the LME, EnClear and Nodal markets. It is currently resized each month and revised member contributions are called on the fourth business day of each month.

LME clearing member contributions to the commodities default fund currently comprise approximately 80% of overall contributions. LME clearing members requested the release of their default fund contributions in advance of the normal monthly resizing process.

Following a decision by the Risk Committee, LCH.Clearnet will be resizing the commodities default fund on September 22 and will post contributions for clearing members of the remaining markets for value 26 September 2014.

Clearing members for EnClear and Nodal markets will be informed of adjustments to their contributions by email on 25 September. These members should be aware that they will receive part payment of interest on commodities default fund contributions from late September resizing at the beginning of October and a further payment in early November.

The usual resizing and recalculation cycle for the commodities default fund will resume from November.

Please contact your LCH.Clearnet representative should you have any questions.