LCH.Clearnet Ltd, the UK arm of European clearing house LCH.Clearnet, plans to offer its SwapClear over-the-counter (OTC) interest rate swap clearing service to the buy-side trading community in the second half of 2009.
The clearer says this will grant the buy-side access to OTC interest rate swap clearing for the first time.
The new service will be based on the firm’s current clearing model, but will have additional functionality to support the segregation of client portfolios and margin. Clients will be able to access the service through a SwapClear clearing member, reducing their counterparty credit risk.
“This important development will help reduce systemic risk and improve market transparency,” said Joe Reilly, director of SwapClear at LCH.Clearnet, in a statement. “The broadening of SwapClear’s offering to include buy-side trading clients will significantly increase the proportion of important entities able to access clearing in the rates market.”
He added, “We are working hard with our membership to produce a solution that is supported both by the key liquidity providers in the market and the buy-side, thereby ensuring our offering is fully attuned to the whole market’s needs.”
SwapClear was launched in 1999 and now clears for over 65%, or $85 trillion outstanding notional value, of the global interbank interest rate swap market, clearing trades in 14 currencies with a tenor of up to 30 years.