LCH.Clearnet named Risk Magazine's "Clearing House of the Year"
LCH.Clearnet Group (LCH.Clearnet) has been named “Clearing House of the Year” by Risk Magazine.
The annual Risk Awards recognise best practice and innovation in the derivatives markets. The judging criteria include risk management, customer satisfaction, responsiveness to new regulations, engagement with regulators, liquidity provision and creativity.
Michael Davie, CEO of LCH.Clearnet Ltd, said: “We are pleased to be recognised as the leading global clearing house for a third time by one of the most respected publications in the industry. The growing demand for clearing, especially in the OTC markets, represents a welcome shift towards a safer market structure. However it also requires participants to adapt and develop new workflows, services and even products. At LCH.Clearnet, we continue to drive innovation in the systems we develop and through the enhancement of our risk management approach, as well as expanding the reach of our clearing capabilities across new asset classes and geographies. We are fully committed to maintaining our reputation as the leading horizontal, international and risk management driven CCP.”
Some of LCH.Clearnet’s milestones in 2013 include:
- SwapClear, LCH.Clearnet’s market-leading interest rate swap clearing service, ended 2013 with a 76% market share of interest rate swap buy-side activity, clearing an average of $224 billion USD notional daily throughout the year. The service recalibrated its initial margin model to ensure optimal performance in a range of rate environments, expanded its reach to the Asia-Pacific region, broadened its product set and modernised workflow to deliver safe, real-time clearing with certainty.
- ForexClear, LCH.Clearnet’s market-leading service for FX Derivatives, cleared over $800 billion USD in Non Deliverable Forwards (NDFs) during 2013. In January 2013 the service began to support regulatory reporting of FX trades in the US and in March 2013 moved from batch to real time registration. In June 2013 the service added an additional matcher to allow a choice of access and in November 2013 a new offering for the buy-side was launched, providing enhanced asset protection based on the proven LSOC model.
- CDSClear, LCH.Clearnet’s credit default swap clearing service, extended its reach to include European clients and US clearing members in July 2013. In December 2013 the CFTC granted LCH.Clearnet SA registration as a derivatives clearing organisation (DCO), enabling the service to provide US client clearing for broad based indices. In the same month, CDSClear’s product set was expanded with the introduction of 187 single-name CDS.
- In October 2013 LCH.Clearnet became the first CCP to offer clearing of OTC Equity Contracts for Difference (CFDs), helping investors access the best market price for a trade while benefiting from reduced counterparty risk, collateral efficiencies and cross-margining opportunities between cash equities and CFDs.
- In May 2013 LCH.Clearnet began clearing for NASDAQ OMX NLX, the new London-based single market for trading the full European interest rate curve. The introduction is another example of LCH.Clearnet’s commitment to working with multiple exchanges and venues on its open, horizontal platform.
- In November 2013 LCH.Clearnet Ltd implemented changes to its remaining general default fund by dividing it into three product specific default funds: a commodities fund, a listed interest rate derivatives fund and an equities and equity derivatives fund. This change reinforces the default waterfall by implementing prudent risk management standards and minimises the risk of contagion across each service in the event of a default.
- In May 2013 the London Stock Exchange Group became the majority owner of LCH.Clearnet, acquiring a 57.8% stake. The resulting partnership is a key achievement, ensuring a clear growth path for LCH.Clearnet’s open horizontal model for clearing across multiple markets and geographies.
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The LCH.Clearnet Group is a leading multi-asset class and multi-national clearing house, serving major exchanges and platforms as well as a range of OTC markets.
LCH.Clearnet’s world-class risk management framework provides exceptional levels of protection to international markets, as has been proven through the management of recent defaults. As demand for robust clearing services continues to grow, LCH.Clearnet is committed to achieving the highest standards of risk management across all asset classes cleared.
LCH.Clearnet is majority owned by London Stock Exchange Group (LSE.L), a diversified international exchange group that sits at the heart of the world's financial community.
For more information on LCH.Clearnet visit www.lchclearnet.com/media_centre
Contact: Rachael Harper +44 207 426 7175