Anglo-French clearing house LCH.Clearnet has appointed BNY Mellon as an additional US collateral custodian with which members clients may lodge collateral.
The appointment follows a focus on collateral management by the CCP led by the regulatory drive to clear a wider variety of financial instruments, including OTC derivatives, amid recognition of the role clearing plays in ensuring the safe functioning of markets.
As a custodian for LCH.Clearnet, BNY Mellon will provide members and their clients with a choice of provider both for lodging collateral at the commencement of a trade and for managing the allocation of funds to either party due to market variation throughout the lifecycle of the trade.??
Daniel Maguire, head of LCH.Clearnet’s SwapClear US, said: “This provides our members and their clients with a choice of custodian with which to lodge collateral, whilst maintaining our stringent approach to risk management.”
Reporting by: Janet Du Chenne, Global Custodian, an Asset International publication