LCH launches clearing of European Subordinated Financials Credit Derivatives
- Introduces clearing for Markit iTraxx Europe Subordinated Financials Index and single names
- First CCP to offer clearing of Subordinated Financials Single Name CDS
- Goldman Sachs among first participants to clear the products
- Demonstrates continued growth and innovation of the service, following a record year for volumes
20 February 2020
LCH, a leading global clearing house, today announced that its CDSClear service has expanded its product offering to clear Markit iTraxx Europe Subordinated Financials Index and its 30 single name constituents. Goldman Sachs is among the first participants to clear these products.
Subordinated Financials CDS are credit default swaps referencing the subordinated debt of the main European banks and insurance companies.
Frank Soussan, Global Head of CDSClear, said: “LCH is proud to offer the broadest product offering of any credit clearing house. This is first time that both Subordinated Financials Indices and all their single name constituents are available for clearing. The launch comes following rigorous risk reviews and testing, both internally and with the market. We are pleased to offer another innovative product which gives our members and their clients the opportunity to make their trading activity more efficient.”
Jasdeep Singh Aneja, Managing Director, Goldman Sachs said: ”We are pleased to be among the first to support this important development. Clearing the full range of Subordinated Financials, alongside Senior Financials single names allows us to benefit from significant margin offsets through LCH’s portfolio margining, in addition to the inherent operational and counterparty risk management advantages of clearing.”
Commenting on the launch, Christoph Hock, Head of Multi-Asset Trading, Union Investment, said: “CDSClear is a key partner for our credit business. We highly appreciate that innovation has always been one of the main drivers at CDSClear as it allows us to extend clearing benefits to a greater portion of our credit portfolio. We are very supportive of any new product launch as we are keen on clearing the broadest scope of products on a voluntary basis, in addition to the EMIR mandated products. We’re delighted to be part of this first for the market”
For further information
Rhiannon Davies, Tel: +44 (0)20 7426 7523
Lucie Holloway, Tel: +44 (0)20 7797 1126
LCH is a group of leading multi-asset clearing houses that provides proven risk management capabilities across a range of asset classes. As demand for robust clearing services continues to grow, LCH is committed to maintaining the highest standards of risk management across all our services.
As the markets’ partner, LCH operates an open access model, offering a choice of execution venues, delivering unprecedented choice and efficiencies to the marketplace.
LCH operates clearing houses around the world, with clearing houses incorporated in the UK, France and the United States with additional offices in the Asia Pacific region. It offers clearing services across asset classes including OTC and listed rates; CDS and FX; fixed income; commodities; cash equities and equity derivatives. LCH also serves the non-cleared derivatives market through LCH SwapAgent, a new service which extends the efficiencies and infrastructure of clearing to the market, without acting as a central counterparty.
LCH is majority owned by London Stock Exchange Group (LSE.L), an international markets infrastructure business that sits at the heart of the world's financial community.
Further information on LCH can be found at www.lch.com