SwapClear, the OTC derivatives clearing business of Anglo-French clearing house LCH.Clearnet – an acquisition target of exchange group NYSE Euronext – has signed up US bank Wells Fargo and introduced a new onboarding solution.
The new tool, designed by software company Formicary, helps to bring new members onboard LCH.Clearnet's SwapClear facility, but also serves as a readiness solution for existing members.
SwapClear, a global clearing service for interest rate swaps IRS, currently has 53 clearing members. The 950,000 trades in SwapClear have an aggregate notional principal amount of over US$295 trillion, with a further US$41.5 trillion of cleared transactions removed through multilateral trade compression.
“Interest rate swaps are an integral part of our business and clearing will enable us to mitigate counterparty risk and benefit from operation efficiencies,” said Adrian Kayari, head of interest rate derivative trading at Wells Fargo.
A number of firms are believed to be interested in acquiring LCH.Clearnet
but only NYSE Euronext and Markit, a financial information service provider, has confirmed a bid. The interest is partly driven by impending regulation in the US under the Dodd-Frank reforms and in Europe under the MiFID review and European market infrastructure regulation to bring about the centralised clearing of OTC derivatives.