Essentials

Everything you need to know about clearing at RepoClear.

Trade Workflow

The repo market currently operates through direct, voice broker transactions or screen trading. All types of trade sources are accepted by LCH Ltd.

Direct or broker trades are fed into an independent matching system, called ETCMS. Once the trade has been matched and validated to check it is within the RepoClear parameters, it is registered and LCH Ltd assumes the counterparty risk.

ATS (Automated Trading System) trades are registered with RepoClear when they are 'agreed on the screen'. The trade details are sent automatically to LCH Ltd, supporting STP. Both repo and cash bond trades transacted on ATSs are registered by the Clearing House on a novation basis as soon as the terms of the trade have been checked by LCH Ltd, thereby facilitating trade anonymity.

On receipt and confirmation of eligible transactions, trades are governed under the rules of LCH Ltd Rulebook.

Settlement netting

At the prescribed time in each market, RepoClear nets and shapes delivery obligations due for settlement. In some markets, the settlement netting may result in several delivery obligations for LCH due to cross-border settlement or maximum delivery size requirements.  Members are then notified of their own specific delivery obligations via Member Reporting.

Payment netting

If there are no securities delivery obligations, all net cash delivery obligations are aggregated into one net amount per market, which is paid through the appropriate depository.  Margin obligations from all platform-traded and bilaterally-traded contracts, together with any coupon payments, are netted into a single payment per currency per day and paid through the relevant payment system.

Member reporting

Member reporting provides Clearing Members with real-time access to their LCH Ltd reports.

Margin

To guarantee the net positions of Clearing Members and be able to manage its default risk, LCH Ltd requires its members to deposit initial margin, additional margin to cover specific risks and variation margin.

This overall margin is updated during the day for cash and repo trades. It can be deposited in the form of eligible cash or securities.

RepoClear User Groups

RepoClear ensures that our Clearing Members are deeply involved during all stages of development for our service offering. RepoClear Ltd works very closely with market participants through our well-established RepoClear User Groups to ensure that our offering is tailored to your ever-changing requirements.

The RepoClear Product Advisory Group ("RPAG") is made up of key market participants. It provides strategic direction to the development of LCH's service.

The RPAG is supported by the RepoClear Operational Working Party which deals with matters pertaining to operational implementation, processes and projects. RepoClear also has a Risk Working Group to support risk related developments.

RepoClear Approved Trade Matching Systems and Automated Trading Systems

RepoClear Ltd accepts eligible repo and cash bond trades from Approved Trade Matching Systems (“ATMS”) and Automated Trading Systems (“ATS”) as defined in the LCH Ltd rulebook.

The table below details the current approved list: