Margin and capital efficiency for deliverable and non-deliverable FX
ForexClear delivers unmatched capital and operational efficiencies, including the flexibility and choice of both US and European clearing models. Developed in partnership with market participants, ForexClear empowers you to more effectively meet your daily clearing needs while at the same time benefiting from LCH’s proven risk and default management solutions.
Foreign exchange markets are shifting to a cleared environment. With interest rate and index credit derivatives already subject to mandatory clearing across the G20 countries, regulators have noted their desire for NDFs to become cleared. ForexClear makes this migration easy for our members and clients, mitigating their counterparty credit risk while delivering improved operational efficiencies and keeping margin costs lower through the use of multilateral risk netting.
The burden of capital requirements has deepened with an array of ongoing requirements, such as the Leverage Ratio, Counterparty Credit Risk charges, and the Liquidity Coverage Ratio, as well as the uncleared margin rules for OTC derivatives.
The timeline below demonstrates the uncleared margin rules that will affect many in the OTC derivatives markets over the next two years.
VM is posted daily today by all entities
IM posting is required for all entities with more than the below levels of outstanding total gross derivative notional:
- 2018 — $1.5 trillion
- 2019 — $0.75 trillion
- 2021 — $50 billion
- 2022 — $8 billion
ForexClear launched in 2012 with a single objective: to offer global currency markets a dedicated service for clearing NDFs. The service has expanded its product offering to include Deliverable FX Options, Forwards, and Non-Deliverable Options clearing.
Since we launched, we have experienced dramatic growth in our cleared volumes.
Key benefits of clearing at ForexClear:
- Multilateral risk netting – reduces portfolio exposure and ultimately lowers initial margin requirements
- 24-hour-a-day clearing, five days a week
- Full STP workflow management – resulting in reduced operating risks and costs
- A unique LCH default management process – specialist member participation for efficient and orderly liquidation in which the defaulter pays
Offers clearing for 95% of the global NDF marketplace
A leader in safeguarding your assets
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Our growth brings you more liquidity
First steps and other useful information
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