Schroders becomes first European asset manager to clear with LCH ForexClear

With trades facilitated by Citi, Schroders cleared NDF trades across a range of Asian and Latam currency pairs.

Schroders, which manages £731.6 billion worth of assets, has become the first European asset manager to clear through LCH ForexClear.

The asset manager cleared non-deliverable forward (NDF) trades across a wide range of Asian and Latam currency pairs. ForexClear member, Citi, facilitated the trades as Schroders’ clearing broker.

LCH ForexClear has seen continued growth within its FX client clearing services, with increasing numbers of buy-side firms acknowledging the importance of margin and operational efficiencies, as well as enhanced risk management available through FX clearing.

“With Phase 6 of the Uncleared Margin Rules implemented from September 2022, ForexClear has seen a growing number of firms choose to clear their FX trades,” said James Pearson, head of ForexClear, LCH.

“We warmly welcome Schroders as the first European asset manager as it looks to benefit from the margin, capital, operational and credit efficiencies available through FX clearing. We look forward to partnering with Schroders and others in expanding our product offering from NDFs to also include options, forwards and swaps.”

In the first nine months of 2022, LCH ForexClear registered a record $19.1 trillion cleared in total notional, up 17% year-on-year.

In Q3 this year, LCH ForexClear experienced a record quarter for non-deliverable FX client clearing volumes at $140 billion, 146% higher than in Q3 last year.

“Implementing ForexClear is an important step in increasing our central clearing capabilities for our global clients,” said Stephanie Whitford, global head of derivatives services at Schroders.

“ForexClear offers increased transparency, reduces counterparty risk and strengthens liquidity in the FX market. Schroders are delighted to be the first European asset manager utilising this service and will be looking to increase our client and clearing broker usage over the coming months.”