LCH Spider, new portfolio margining service for interest rate derivatives, goes live

Report date
  • LCH Spider enables margin offsets between listed and OTC interest rate derivatives portfolios
  • Offers members and their clients significant opportunity to benefit from risk and collateral efficiencies
  • Service available on an open access basis

LCH, the global clearing house, today announced that it has launched LCH Spider, its portfolio margining tool for interest rate derivatives. The go-live follows receipt of all necessary regulatory approvals. From today, eligible members and clients using LCH’s SwapClear and Listed Rates services can now offset margin between OTC and listed interest rate derivatives.

LCH Spider is a fully automated service that analyses member and client portfolios and selects which eligible trades correlate and provide risk reduction. If a member has opted in, the listed rates are then transferred to their OTC portfolio for offsetting and delivering risk and collateral efficiences. Initially, portfolio margining will be available for Sterling and Euro-denominated short term interest rate futures (STIRs) with plans to add further eligible contracts, in line with customer demand and LCH’s risk management framework.

LCH Spider is available on an “open access” basis, to any trading venue, that is connected to LCH and which lists suitably correlated interest rate derivatives. LCH has worked with Nasdaq NLX to include its eligible futures contracts as part of LCH Spider’s go-live.  LCH is also set to introduce  CurveGlobal contracts  following the platform’s planned launch in Q3 2016. The  implementation of MiFID II will further drive the possibility of greater risk offsets. Members and clients looking to calculate the  potential benefits of using LCH Spider on their portfolios can simulate this using SMART Spider, a new extension of LCH’s margin simulation tool.

Daniel Maguire, Global Head of Rates and FX Derivatives, LCH, said: “LCH Spider has the potential to be a game changer for the rates market and we are delighted to deliver this service to our members and their clients. This is another example of our innovation and commitment to partnering with the market to deliver greater choice and efficiencies, in line with LCH’s robust risk management and regulatory framework.

“With the world’s largest interest rate derivatives liquidity pool at SwapClear and our open access approach, LCH Spider represents the next step in portfolio margining and is a compelling offering for those looking to manage their risk and collateral obligations more efficiently.”

For further information

Lucie Holloway / Rhiannon Davies, Tel: +44 (0)20 7797 1126 /+44 (0)20 7426 7523

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About LCH

LCH is a leading multi-asset class and multi-national clearing house, serving major exchanges and trading platforms as well as a range of OTC markets.

LCH’s world-class risk management framework provides exceptional levels of protection to international markets, as has been proven through the management of past defaults. As demand for robust clearing services continues to grow, LCH is committed to achieving the highest standards of risk management across all asset classes cleared.

LCH is majority owned by London Stock Exchange Group (LSE.L), a diversified international market infrastructure group that sits at the heart of the world's financial community.