LCH Receives Licence to Clear FX NDFs in Japan

The Japanese Financial Services Agency granted LCH the license on October 31, 2018.

London Clearing House Group (LCH), a global clearinghouse, has received approval from the Japanese Financial Services Agency (FSA) to extend its clearing license, the firm revealed today. The license extension, which was granted on October 31, 2018, allows LCH’s ForexClear service to clear FX non-deliverable forwards (NDFs) on behalf of the company’s clients based in Japan.

This extension is on top of the services LCH was already licensed to perform in Japan. In 2016, the FSA granted the clearinghouse permission to clear non-Yen over-the-counter (OTC) interest rate derivatives.

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Before LCH secured this latest approval from the Japanese regulator, LCH’s Japan-based customers could only access ForexClear through international subsidiaries. According to the statement, the license approval underscores the company’s commitment to the Japanese financial market.

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Kate Birchall Head of Asia Pacific at LCH
Kate Birchall
Source: Linked

Commenting on the development, Kate Birchall, Head of Asia Pacific, LCH Ltd, said: “Tokyo is home to one of the world’s largest FX derivatives markets and we are honoured to have been awarded this licence to clear NDFs in Japan.”

“This development is an important step for the market, providing Japanese firms access to LCH’s clearing services and global liquidity pool, reaffirming our long-term commitment to Japan.”

LSE Ups Its Stake In LCH

In October, Finance Magnates reported that the London Stock Exchange (LSE) had upped its stake in LCH. Specifically, the exchange operator, which has been gradually increasing its majority stakeholder position in recent years, upped its stake by an additional 15.1 percent – meaning it now controls over 80 percent of the company.

To achieve this, LSE will buy a number of shares from minority stakeholders. In the statement released by the exchange operator at the time, Borsa Istanbul, CFT & Viel & Cie, Commerzbank, Deutsche Bank, Nasdaq, and Nomura are the companies it is buying out. The LSE will pay up to a maximum of €438 million (£384 million) for the 15.1 percent share in the company.

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