LCH Limited EquityClear Service - Fees

An LCH Limited (“LCH”) EquityClear clearing member (each, a “Member”) is required to pay LCH a clearing fee for its clearing activity within the EquityClear service during each calendar month, equal to:

• the number of trades it cleared within the EquityClear service during a calendar month, times;
• the fee specified in the Band applicable to such Member, for such calendar month.   

The Band applicable to a Member for a calendar month is specified in the table below and is determined by these criteria:

• the number of Primary Exchanges from which trades cleared by such Member within the EquityClear service during such calendar month originated;
• the number of Other Trade Sources from which trades cleared by such Member within the EquityClear service during such calendar month originated;  
• the number of CSDs on which trades cleared by such Member within the EquityClear service during such calendar month were settled; and 
• the ADV of the Member for such calendar month.    

Band 1 will apply to a Member for a calendar month, unless it can satisfy all of the criteria (Primary Exchange, Other Trade Source, CSD and ADV) of a higher Band, in which case that higher Band will apply to the Member for the calendar month.

A Member will be charged an additional fee for each OTC Trade that it clears within the EquityClear service specified in the Band applicable to such Member, for such calendar month.  This fee rate is detailed in the table below under the heading “Additional Fee (£) per OTC Trade”.  A monthly cap of £20,000 will apply to the OTC trade tiered fee schedule.

For the purposes of this fee schedule:

(a) “ADV” means, in respect of a Member and a calendar month, the number of trades cleared by such Member within the EquityClear service during such month, divided by the number of EquityClear service business days in such month;

(b) “Band” means a band within the table, above;

(c) “Primary Exchange” means an exchange as determined and specified by LCH (in its sole discretion), below;

(d) “Other Trade Source” means a trade source as determined and specified by LCH (in its sole discretion), below; and

(e) “CSD” means a central securities depository.

 (f) “OTC Trade” means a trade, the terms of which are (a) agreed bilaterally outside a trading venue, and (b) submitted to such trading venue for execution or matching (off order book) in accordance with its rules.

LCH has determined each of the following to be a Primary Exchange:

• Borsa Italiana
• London Stock Exchange
• Nasdaq Copenhagen
• Nasdaq Stockholm
• Nasdaq Helsinki
• Oslo Bors
• SIX Swiss Exchange

LCH has determined each of the following to be an Other Trade Source:

• Aquis
• BlockMatch MTF
• Cboe
• Equiduct
• Sigma X MTF
• Traiana
• Turquoise
• UBS MTF

Example: There are 21 business days in a calendar month and a Member has an ADV of 561,244, three Primary Exchanges, three Other Trade Sources and four CSDs, for such month. Band 6 applies to the Member and it will pay a clearing fee for such calendar month of 21 x 561,244 x £0.005 = £58,930.62.

A minimum activity charge of £5,000 per calendar month applies to each Member (the “MAC”), such that, if a Member’s clearing fee for a calendar month (as determined above) is less than the MAC, then the Member is required to pay LCH the MAC of £5,000 for such month.

2021 Service Opening Table

If two or more Members are affiliates of each other (as determined by LCH in its absolute discretion), then all such Members will be treated as a single Member for the purposes of determining the clearing fees payable by them, such that the ADV, Primary Exchanges, Other Trade Sources and CSDs for such Members will be determined on an aggregate basis across all of them.  

A Member is required to pay LCH the settlement fee and messaging fee specified in the Settlement Fee Schedule (attached below) for each settlement instruction between it (or its CSD participant) and LCH (or its CSD participant), in respect of the EquityClear service and the applicable  settlement location.  Such fees are payable at the end of each calendar month, in arrears.

Settlement Fee Schedule

An additional fee of £150 per market, per calendar month, is applicable to those Members that clear in the Czech, Hungarian and/or Polish markets.  

A Member is required to pay LCH a fee of 30p for each settlement effected between it (or its CSD participant) and LCH (or its CSD participant), except where such settlement:

(a) occurs in Euroclear UK and Ireland;

(b) occurs on the Swiss CSD and results solely from one or more trade(s) on the SIX Swiss Exchange, and cross trade venue netting has not been selected for such settlement; or

(c)  results solely from one or more trade(s) on the IOB or IETF segment of the London Stock Exchange and cross trade venue netting has not been selected for such settlement.

If a Member (or its CSD participant) fails to deliver securities under a settlement instruction in respect of the EquityClear service, the Member will be required to pay LCH a penalty fee for each EquityClear service business day that such settlement instruction remains unsettled (in full or part) equal to the Fixed Fee plus the Variable Fee. It should be noted that all fails in the same ISIN settling in the same CSD account are netted together before calculating the Fees. As such, two or more qualifying failing settlement instructions would only be charged a single Fixed Fee per day. For the purposes of this section:

(a) “Fixed Fee” means:

     (i) £2, in respect of a settlement instruction that is a Market Maker Instruction originating from trades effected on any or all of the following;

                   (a) any segment of the London Stock Exchange, as listed in ‘Figure 1’ (at the end of this webpage); and/or

                   (b) the SIX Swiss Exchange; or

     (ii) £20, in respect of any other settlement instruction; or

    (iii) £17.50 in respect of any settlement instruction in a Euro Market CSD, Austria, Belgium, Finland, France, Germany, Italy, Netherlands, Portugal, Spain.

(b) “Market Maker Instruction” means a settlement instruction that results from one or more trade(s) effected on one or more trading venue(s) by an entity that is a Registered Market Maker for each such trading venue and the securities subject to such settlement instruction;

(c) “Registered Market Maker” means, in respect of a security and a trading venue, an entity that is registered as a market maker for such security by the trading venue; and

(d) “Variable Fee” means, in respect of a settlement fail, a fee equal to:

       (i) the value of the securities subject to the settlement fail, in or converted to GBP (where such value and rate of conversion (if any) is as determined by LCH in its absolute discretion); times

       (ii) 0.0035% per business day 

LCH will pay 70% of the Variable Fees, in respect of Qualifying CSDs, to such Members to which LCH has failed to deliver securities in respect of one or more EquityClear contract(s). A “Qualifying CSD” means each of these CSDs:

• OeKB (Austria)
• Euroclear Belgium
• CDCP (Czech Republic)
• Euroclear France
• Clearstream Frankfurt (Germany)
• KELER (Hungary)
• Euroclear Netherlands
• KDPW (Poland)
• Interbolsa (Portugal)
• Iberclear (Spain)
• Monte Titoli (Italy)

A Member may request that LCH net eligible failed settlement instructions relating to the Member, if (a) the relevant CSD does not offer technical netting, and (b) LCH’s conditions for the request are satisfied (please contact LCH for details of such conditions) (each, a “Netting Request”).

A Member must submit a Netting Request in the form specified by LCH and to equityclear.ops.uk@lch.com. If LCH receives the Netting Request from a Member:

(a) before 12 midday (London time) on an EquityClear service business day, then LCH will use its best efforts to process the Netting Request as soon as possible on that day; and

(b) after 12 midday (London time) on an EquityClear service business day, or on a day when the EquityClear service is closed, then LCH will use its best efforts to process the Netting Request as soon as possible on the business day immediately following such day.

However, in both cases, delays could occur due to excessive volume or operational issues. A Member is required to pay LCH a fee of £25 for each single settlement instruction that is netted-off, in respect of a Netting Request.

If a Member fails to deliver securities under a settlement instruction in respect of the EquityClear service on the intended settlement date (“ISD”), and such failure persists (in part or full) for four EquityClear service business days after the ISD, the Member will be required to pay LCH (a) an administration fee of £75 if LCH issues a buy-in notice, and (b) a further £125 for execution of the buy-in and (c) for any cost, loss and/or expense arising from any resulting buy-in and such settlement fail (as determined by LCH in its absolute discretion).

A Member may request LCH to (a) cancel a settlement, and (b) instruct new settlement instructions in its place ((a) and (b) collectively, a “Split Request”). A Member will be required to pay LCH £25 for each Split Request.

The membership fee of each Member is £25,000 per year, which is payable in advance at the start of each year and will be refunded on a pro rata basis if the Member ceases to be a Member during such year.

A Member is required to pay LCH an annual fee for each LCH client account in the Member’s name, as specified below:

A Member is required to pay £4,000 per year to LCH for each non-clearing participant (“NCP”) that it has appointed within the EquityClear service, which fee is payable in advance at the start of each year and will be refunded on a pro rata basis if the NCP ceases to be appointed as the Member’s NCP during such year.

A Member may request LCH to provide real time trade confirmation messages to it (such service, the “RTCS”). A Member will be required to pay LCH for the set-up costs and messaging costs of the RTCS on a case by case basis, depending on the messaging option chosen and the Member’s existing connectivity.

A Member is required to pay LCH a fee for any testing the Member undertakes, which uses or involves any system, facility or resource of, or provided by, LCH. The fee will be determined by LCH on a case-by-case basis, depending on the extent of use of LCH’s time and resources.  

A Member is required to pay LCH an hourly fee of £120 (subject to a minimum charge of £240) for ancillary services that LCH provides to a Member, including the regeneration of historic reports or the production of ad-hoc reports.

If LCH incurs overdraft charges and/or costs at a CSD as a result of, or in connection with, the failure or action of a Member (or its settlement agent), the Member will be required to reimburse LCH for such charges and/or costs.

Words that begin with a capital letter, but are not defined, on this webpage have the meaning specified in the LCH rulebook, which is located at www.lch.com/resources/rulebooks/lch-limited.

Figure 1

• SETS on AIM (AMSM)
• FTSE Small Cap (SSMM)
• London Standard listed on SETS - non-index (SSMU)
• Other non-index equity on SETS (SET3)
• Sovereign controlled commercial company on SETS (SET2)
• Specialist Funds market on SETS (SFM1)
• Global Equity Segment (GES1)
• High Growth Segment (HGS1)
• SETSqx (HGS2, SFM2, SSQ3, ASQ1 & ASQ2)
• International Order Book (IOBE & IOBS)