Security Deed Arrangements under EMIR - Update

Report date
Company Circular No:

LCH.Clearnet Ltd Circular No 3493

Date: 11 July 2014
To: All LCH.Clearnet Ltd Clearing Members

To all LCH.Clearnet Ltd Clearing Members

Further to LCH.Clearnet Ltd circular No 3455, clearing members are reminded that LCH.Clearnet Ltd's ("LCH.Clearnet") EMIR-compliant account offering requires members domiciled in certain jurisdictions to complete Security Deed documentation if they wish to offer client clearing. The Security Deed is not required for all members, as some jurisdictions have implemented legislation that renders the Security Deed superfluous.

Members domiciled in the following countries and wishing to offer client clearing must complete a Security Deed – please note the recent addition of Canada and Japan.

  • Australia
  • Canada
  • Denmark
  • Germany
  • Hong Kong
  • Japan
  • Netherlands
  • Poland
  • Portugal
  • Sweden
  • Switzerland

For more information on the account offerings available from LCH.Clearnet click here.

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Security Deed Execution Instructions

When executing the Security Deed for the first time (such Security Deed being the "Original Security Deed"), Members domiciled in one of the jurisdictions listed above must list in Schedule 2 of the Security Deed all the Clients they have at that time.

If a relevant Member wishes to on-board further Clients (or to open additional accounts at LCH.Clearnet for an existing Client) after it has executed the Original Security Deed, it will have to execute an "Additional Security Deed" in order to ensure that these additional Clients or accounts are also covered. An Additional Security Deed  will need to be executed each time further Clients are on-boarded or there is a change to the LCH.Clearnet  accounts used for an existing Client. Each Additional Security Deed has an Annex in which Members should list all those Clients to which the Additional Security Deed relates. The form of Additional Security Deed is found in Schedule 3 to the Original Security Deed.

For the avoidance of doubt, Members domiciled in one of the above jurisdictions wishing to offer client clearing should ensure that their Security Deed documentation covers all accounts opened for clients, including omnibus segregated accounts as well as individually segregated accounts. This is required in order to support the porting of positions by (or the return of client clearing entitlements directly to) Clients of that Member in the case of a Member default.