LCH.Clearnet Initiates Expansive Clearing of European Credit Derivatives

Global Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term, LCH.Clearnet SA, has announced implementation of its CDSClear service, which has begun clearing Markit iTraxx Senior Financials Indices, according to an LCH.Clearnet statement.

LCH.Clearnet has embarked on an initiative to consolidate the clearing of credit default swaps (CDS) referencing banks, in conjunction with some of CDSClear’s clearing members.

In particular, CDSClear has seen an expansion to its eligible product suite to include a number of instruments fueled by member demand. These include senior financials, which are credit default swaps and CDS indices that reference major European financial institutions.

Overall, LCH.Clearnet has reported the following products for clearing eligibility via CDSClear:

• iTraxx Senior Financial Indices from Series 5 onwards, 5Y & 10Y tenors
• All 36 Single Names that have ever been a constituent of the indices
• Clearnet is the only EMIR-authorized clearing house to clear credit default swaps and offers the broadest European coverage of any CCP, clearing 300+ single-name CDS and 73 index series.

According to Frank Soussan, Global Head of CDSClear, LCH.Clearnet, in a recent statement on the clearing capabilities, “We’re delighted to extend our product suite, following rigorous risk reviews and testing.”

“This launch is a testament to CDSClear’s commitment to innovation and providing robust Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term to the market. We’re seeing significant demand for clearing these products as members strive to efficiently manage their margins,” he added.

Last month, LCH.Clearnet made headlines after Societe Generale Prime Services reported that its Futures Commission Merchant (FCM) conducted its first customer Non-Deliverable Forward (NDF) cleared trade with LCH.Clearnet’s ForexClear service acting as the clearinghouse.

The LCH.Clearnet Group is a global clearinghouse boasting comprehensive multi-asset capabilities – it serves a number of the world’s leading exchanges and trading platforms as well as a range of Over-the-Counter (OTC) markets. LCH.Clearnet Group is majority owned by the London Stock Exchange Group (LSEG).