Thursday, March 27, 2014 12:33:53 PM

LCH reports surge in OTC clearing activity

OTC derivatives clearing on LCH.Clearnet has seen significant growth, with client clearing of swaps more than doubling as market participants implement global regulatory reform.

In the 11 months to end of February 2014, LCH.Clearnet’s SwapClear business saw global client clearing of swaps grow to a notional of US$8.8 trillion cleared, while interest rate swap notional cleared increased by 17% to US$472 trillion.

London Stock Exchange Group (LSEG), which owns a majority stake in LCH.Clearnet, also stated that clearing volumes for fixed income, commodities and equities have increased in its latest financial statement.

Xavier Rolet, CEO of LSEG, said: “The clearing volumes in the SwapClear OTC business continue to grow and we are pleased with its performance. We remain focused on delivering the benefits from our partnership with LCH.Clearnet.”

Regulatory reform stemming from the Dodd-Frank Act in the US and European market infrastructure regulation (EMIR) requires OTC derivatives transactions to be centrally cleared.

Central clearing and electronic trading of swaps has already begun in the US, while in Europe, the recent approval of Nasdaq OMX Clearing to clear OTC contracts under EMIR means that regulators will now have six months to formulate technical standards for clearing of OTC derivatives.