LSEG to Increase Majority Stake in Clearing House LCH Group

Some OTC traders are afraid of incurring higher costs when executing and clearing their trades at the same venue.

The London Stock Exchange has agreed terms with certain minority shareholders for increasing its controlling stake in LCH Group Holdings Limited, the global multi-asset clearing house, according to an official statement.

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Under the terms of the agreement, the LSEG will pay undisclosed sum to raise its stake in LCH up to a maximum of 6.8 percent. Back in 2013, the London exchange increased its ownership stake in LCH.Clearnet from 2 percent to 57 percent.

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The LSEG said that all shareholders in LCH, who are also users of the clearing house, were notified of the share sale but didn’t state if they have agreed to back the deal, which is expected to close this year.

LCH is the world’s largest clearing house for interest rate swaps, which makes up the majority of all off-exchange trading. The LSE and LCH argue that their partnership will give global traders greater efficiency and freedom.

However, many OTC markets participants have concerns that they may be forced to incur higher costs when executing and clearing their transactions at the same venue.

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