SA Acceptable Securities

At LCH SA, Clearing Members and their clients are able to post debt securities issued by high quality sovereign government issuers and certain government agencies to meet initial margin obligations.

LCH SA accepts three forms of non-cash margin:

  1. Securities collateral: deposited via Full Title Transfer Accounts opened by LCH in various Central Securities Depositories (CSDs)

  2. Central Bank Guarantee offers provided by the National Belgium Bank (NBB) or Dutch National Bank (DNB)

  3. CDSClear Pledge Solution: enables CDSClear members to enter into a collateral arrangement whereby it deposits eligible collateral via a Single Pledgor Pledged Account (SPPA) opened by LCH SA in Euroclear Bank

 

Securities Collateral Haircuts

All securities posted as collateral are subject to “haircuts”. The size of the haircut is influenced by the tenor of the bond pledged. Haircuts are typically smaller for bonds with shorter maturities and higher for securities with longer tenors.

For the most up-to-date information on RepoClear, Cash Equities, Listed Derivatives & CDSClear haircuts, please log into the CaLRM secure area.

Collateral Rules and Regulations

Looking for more detailed information on the regulations regarding posting collateral at LCH SA? The links below provide a deeper dive on all matters concerning pledging margin on our clearing services.

View the section of the LCH SA Rulebook concerning posting collateral at our securities, derivatives and fixed income clearing services

View the CDSClear clearing procedures

Security Enquiry

Unsure whether a security is eligible as initial margin collateral at LCH SA?

Securities

Acceptable Securities Collateral and Current Haircuts

For the most up-to-date version on Collateral, please log into one of the following secure areas:

•    CaLRM Secure area -  Fixed Income, Cash Equities & Listed Derivatives haircuts
•    CDSClear Secure area  - CDSClear haircuts

Collateral interest rates & fees

These rates are applied on the 3rd business day of the following month.

Click to view the Treasury Fees

Securities Collateral - Essential Details

Collateral Operating Procedure

Equities, Listed Derivatives & Fixed Income

For non-cash collateral:

1 – Deposit of securities:

11- On J-1, CMS Instruction is sent at 16:00 CET to LCH SA;

12- On J, instructions (Franco or Sell Free of payment) keyed in on EOC Bank or ESES (EOC France) by member and by LCH SA (Buy free of payment) if member uses Sell free of payment;

13– On J, if the instructions are matched before 12:00 CET: restitution of Cash Euro possible on member request

14– If the instructions are matched after 12:00 CET: restitution of cash euro on J+ 1.

2 – Withdrawal of securities:

21– On J-1, CMS Instruction is sent at 16:00 CET to LCH SA;

22– On J-1 value J, LCH SA makes withdrawal in its system to calculate member's margin call without these securities;

23 – On J, payment of margin call by member in T2 system (8:30-9:00 am CET) ;

24 – On J, restitution of securities: after reception of payment of margin call, LCH SA keys in (Sell free of payment) on EOC Bank or ESES (EOC France) and member keys in buy free of payment.

3 – Substitution of securities possible:

31– Deposit and withdrawal are done at the same time : member pays in T2 system on 8:30 am CET and receives cash coming from deposit around 12:30 CET if deposit match before 12:00 CET;

32– Deposit done on J-1 (CMS Instruction on J-2) and delay withdrawal on J (CMS Instruction on J-1) to avoid member to provide liquidity on J between 8:30 am to 12:30 CET.

For further information please contact Treasury.Ops.fr@lch.com

CDSClear

Please read the Collateral Movements Procedure.  For any further questions, please contact either treasury.ops.fr@lch.com.

 

You can find the CDSClear Collateral Movements Procedure here

Collateral Account Segregation under EMIR

More technical information on the holding and processing of collateral under the various segregated account structures available to LCH SA Clearing Members and their clients can be found in this helpful document.