Citadel goes live on LCH’s ForexClear

The hedge fund executed its first trade on the FX clearing service with Citi acting as the clearing broker.

US-based hedge fund Citadel has begun clearing FX non-deliverable forwards (NDFs) on LCH’s FX clearing service ForexClear.

Citi is acting as a clearing broker for the firm on the ForexClear service which provides clearing across FX NDFs, options, spot, swaps and forward outrights.

“ForexClear is an important first step in the evolution of FX markets toward central clearing, which will increase transparency, reduce counterparty risk and strengthen liquidity,” said John Niccolai, chief operating officer for global fixed income, Citadel.

“We are pleased to be using the service and look forward to engaging with LCH and other market participants to drive broad adoption of clearing across all currency pairs and FX products.”

The addition follows an expansion of ForexClear’s presence in Asia with the addition of its first Taiwan client CTBC Bank in September.

According to LCH, client clearing has continued to see growth throughout this year with a record quarterly volume of $90 billion on notional in the first quarter, up by almost half on the same period last year.

“This builds on the strong growth at the service, which has historically been driven by a focus on margin efficiencies that will only increase with Phase 6 of the uncleared margin rules in September 2022,” said James Pearson, head of ForexClear at LCH.

“There has now been a realisation that FX clearing can also bring significant capital savings, providing further benefits and helping the industry to respond to SA-CCR.”