LCH, part of London Stock Exchange Group (LSEG), has achieved record clearing volumes for 2021, following the expansion of its services and the building of new connectivity.
In January 2021 LSEG acquired Refinitiv, while in June that year ForexClear also partnered with FXall to improve FX traders’ access to clearing for FX OTC trades.
The new solution is said to provide FXall Settlement Center users a quicker way of clearing NDF trades through LCH’s ForexClear service, while also providing access to its risk management and efficiency benefits.
In addition, LCH strengthened its commitment to Asia through the inclusion of Singapore dollar-denominated cash and government securities as accepted collateral, as well as the extension of SwapClear’s operating hours to better serve the region.
“Throughout 2021, LCH continued to provide the robust risk management, capital efficiencies and operational benefits that support our customers and help ensure financial stability. Our customer centric approach helped drive strong growth across our services,” said Daniel Maguire, group head, post trade, LSEG and chief executive of LCH Group.
“I’m particularly pleased by the growth at SwapAgent as LCH expands its offering to support customers in the non-cleared space. We also enabled a seamless transition to risk-free rates across five major currencies, effectively closing the door on non-USD LIBOR for cleared OTC swaps.”
LCH’s interest rates derivatives clearing service, SwapClear, converted more than 350,000 legacy IBOR-linked contracts as a means of supporting the transition to risk-free rates (RFRs), representing a notional equivalent of over $35 trillion in Q4 of 2021.
Throughout 2021, SwapClear registered 6.8 million trades, an increase of 7% on 2020 and its highest on record.
Additional record highs include the clearing of inflation swaps, with $9 trillion of notional cleared across 322,639 trades, increases of 37% and 39% on 2020, respectively.
LCH SwapAgent saw a year-on-year increase of 489%, with 10,186 trades processed, a record for the service.
As with SwapClear, SwapAgent, together with market participants, worked to facilitate the industry’s transition to risk-free rates in bilateral OTC derivatives, helping to support financial stability.
RepoClear achieved a record €195 trillion of nominal across 9.4 million trades during 2021 in LCH SA, which represents increases of 15% and 29% respectively when compared to 2020.
In addition, at LCH Ltd, RepoClear saw increases of 17% and 28% year-on-year with €42.6 trillion in nominal cleared across 1.1 million trades, respectively.
Across LCH Ltd and LCH SA, RepoClear processed €237.6 trillion of nominal across 10.5 million trades, which both represented records for the service.
Additional achievements last year included a record $21.7 trillion in notional cleared across the service, an increase of 14% from 2020. From that figure, $243 billion was cleared by clients, an increase of 45% over the previous year.
CDSClear saw growth in iTraxx Options grow by 133% at the service compared to 2020, with a record €163 billion of notional cleared in 2021.
In European Single Names CDS, CDSClear achieved a record €210 billion, an 40% increase on 2020.
In addition, CDSClear processed a record $42.5 billion of notional of US Indices CDS, a 28% increase on 2020.
EquityClear in LCH Ltd set a new annual record, registering 1.9 billion trades, an increase of 5% from 2020. Over the course of the year, EquityClear SA connected to additional central securities depositories (CSDs) in Italy and Austria.
CommodityClear, LCH SA’s commodity derivatives service, also achieved an all-time annual record with 42 million contracts cleared, an increase of 23% on 2020’s 34 million.