What We Clear
ForexClear’s cleared product offering covers 95% of the global NDF marketplace.
Built in partnership with the market, and with the benefit of LCH's extensive experience in interest rate swaps clearing, ForexClear offers industry-leading risk management for 17 emerging market currencies. ForexClear is a 24-hour foreign exchange service.
ForexClear subscribes to SwapsMonitor Publications, Inc to determine holidays on the calendars which impact NDF trade eligibility, and requests its Members to do the same. There are some notable exceptions that Members should be aware of, which are listed below.
- ForexClear does not recognise any Saturday or Sunday as a good day. Any trades received for fixing or settlement on such a day will be rejected.
- The Mumbai holiday calendar, which is used to determine the eligibility of USD/INR NDF trades, is only followed for the current calendar year, until we receive confirmation of the final publication of holidays for the following year, which typically occurs in December. Until this time, any holidays outside of the year in question will be disregarded by ForexClear, as these dates are subject to change by the Indian State of Maharashtra.
Unsure about how an OTC FX instrument can be converted into a cleared position? The process begins in exactly the same way you would execute a bilateral FX trade today.
NDFs are negotiated and traded bilaterally between parties. Counterparties can then independently submit their trade side to be matched at a middleware provider or, if executed on a trading venue which is directly connected to LCH, the venue will match and submit the trade directly to LCH on your behalf.
Once received and novated, notification of trade status updates are relayed from ForexClear to members via the middleware provider or venue. Counterparties can also be sent direct notification of clearing acceptance via the ForexClear API.
Once both legs of the trade are facing LCH, we calculate margin requirements for counterparties on an intraday basis and we undertake the fixing and settlement of trades on maturity.
Our members and clients can register trades 24 hours a day, 5.5 days a week.
Once we receive a cleared transaction, assuming sufficient collateral has been posted, trades are registered at LCH within 60 seconds, or 10 seconds for trades executed on a swap execution facility.
The transfer of cash collateral, trade settlement and any other cash transactions associated with ForexClear are facilitated by LCH’s PPS, a direct debit arrangement under which participating banks commit to meet cash calls following instructions from LCH.