LCH Expands Non-deliverable Interest Rate Swaps Offering
March 12, 2019
- Brazilian Real, Chilean Peso, Colombian Peso, Taiwan Dollar, and Thai Baht-denominated non-deliverable interest rate swaps now being cleared at LCH
- Bank of America Merrill Lynch, J.P. Morgan, and Standard Chartered among first participants to clear the new products
- Members and clients have cleared all five currencies at launch
- SwapClear now offers clearing for derivatives across 26 currencies
LCH, a leading global clearing house, today announced that it has expanded its non-deliverable interest rate swaps offering to include five additional currencies. Market participants are now able to clear this product denominated in Brazilian Real, Chilean Peso, Colombian Peso, Taiwan Dollar and Thai Baht.
This product extension has been launched in response to customer demand, particularly among members and their clients in the Asia Pacific and Latin America regions. The initiative builds on LCH’s existing non-deliverable interest rate swaps offering of Chinese Yuan, Indian Rupee and Korean Won, launched in April 2018. LCH has cleared over $5.47 trillion of these currencies since go live.
SwapClear now offers clearing for derivatives across 26 currencies, more than any other OTC clearing house. The additional currencies add to SwapClear’s global, multi-currency pool of cleared OTC liquidity, providing customers more opportunities to benefit from portfolio margining, counterparty risk reduction and operational efficiencies. In 2018, LCH’s interest rate derivatives clearing service, SwapClear, processed over $1 quadrillion in notional and compressed over $773 trillion, estimated to have saved its customers up to $39.5 billion in capital.
Cameron Goh, Global Head of Product, Rates, LCH, said: “We’re delighted to be expanding our non-deliverable swaps offering to include these currencies. Our focus continues to be on providing maximum capital and margin efficiencies for the market, and this latest extension is another example of LCH partnering with our customers to extend our cleared product set.”
Bruno Lettich, Global Head Rates Trading, Standard Chartered Bank, said: “This is an important development for the market, and we are delighted to be among the first members to clear these derivatives at LCH as we continually look to expand the risk management benefits that we provide to our clients. This move by LCH to expand the Asian product offering and the inclusion of Latam currencies, extends the significant margin and capital efficiency benefits of LCH’s global liquidity pool.”
Felicia Grumet, Global Head of OTC Clearing at Bank of America Merrill Lynch, said: “LCH’s expansion into additional APAC currencies provides us with further opportunity to increase capital and margin efficiencies for our clients through SwapClear’s global pool of cleared liquidity. We’re delighted to be able to offer the substantial benefits of clearing these products to our clients across the globe.”
Ariel Jezierski, Head Trader of Latin America Currencies and Emerging Markets, J.P. Morgan, said: “We are pleased to be one of the first participants to clear these products at LCH. This extension into additional Latin American swaps helps us to effectively manage counterparty risk.”
LCH is a group of leading multi-asset clearing houses that provides proven risk management capabilities across a range of asset classes. As demand for robust clearing services continues to grow, LCH is committed to maintaining the highest standards of risk management across all our services.
As the markets’ partner, LCH operates an open access model, offering a choice of execution venues, delivering unprecedented choice and efficiencies to the marketplace.
LCH operates clearing houses around the world, with clearing houses incorporated in the UK, France and the United States with additional offices in the Asia Pacific region. It offers clearing services across asset classes including OTC and listed rates; CDS and FX; fixed income; commodities; cash equities and equity derivatives. LCH also serves the non-cleared derivatives market through LCH SwapAgent, a new service which extends the efficiencies and infrastructure of clearing to the market, without acting as a central counterparty.
LCH is majority owned by London Stock Exchange Group (LSE.L), an international markets infrastructure business that sits at the heart of the world's financial community.