LCH.Clearnet has expanded its credit default swap (CDS) clearing service to offer single-name CDS clearing.
The expansion of CDSClear is aimed at helping European members and clients to benefit from significant capital efficiencies through risk offsets between 187 single-names and existing index products through Monte Carlo Simulation VaR based portfolio margining.
“With the addition of these 187 index constituents we believe the market will benefit from significant efficiencies,” Gavin Wells, CEO CDSClear, said.
“As regulations and clearing commitments evolve, we will continue to work collaboratively with market participants to ensure they can clear with confidence.”
Bill Stenning, managing director, clearing, regulatory and strategic affairs, Société Génerale, said portfolio margining is a key benefit of clearing for him. “The significant increase in the availability of European single name instruments eligible for clearing will undoubtedly be well-received by all market participants.”
The launch of single-name clearing comes after CDSClear extended its reach to include European clients and US clearing members, following regulatory approval.
Market participants are required to report derivatives trades in Europe under the European market infrastructure regulation, and swaps in the US under the Dodd-Frank Act.