LCH.Clearnet has announced that it has acquired sole ownership of International Derivatives Clearing Group, LLC (“IDCG”) from The NASDAQ OMX Group and certain other investors.
The acquisition will enable LCH.Clearnet to operate a U.S. domiciled CCP, subject to regulatory approval, will further enhance the range and choice of its clearing solutions and will facilitate its cross-product margining initiative with NYPC, DTCC and NYSE Euronext. The transaction reinforces LCH.Clearnet’s commitment to the U.S. marketplace, where it already operates IRS clearing through its market-leading SwapClear service.
Under the terms of the transaction, LCH.Clearnet issued to NASDAQ OMX ordinary shares of LCH.Clearnet valued at €19 per share resulting in NASDAQ OMX having a pro forma ownership of 3.7% in LCH.Clearnet. IDCG became a U.S. subsidiary of LCH.Clearnet and was renamed LCH.Clearnet (US) LLC. The planned U.S. domiciled operating entity will be named LCH.Clearnet LLC and is expected to launch in the fourth quarter 2012 subject to regulatory approvals. U.S. clients can continue to use LCH.Clearnet Limited for clearing as well as LCH.Clearnet LLC.
Commenting on the announcement, Ian Axe, Chief Executive of LCH.Clearnet, said:
“This transaction is a strategic move to expand our US footprint and provide clients with additional flexibility and choice. It underscores our continued commitment to a horizontal clearing model for a global marketplace.
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“We look forward to continuing to grow and develop our strategic relationship with NASDAQ OMX in the future.”
Eric Noll, Executive Vice President of Transaction Services U.S. and U.K. at NASDAQ OMX, said:
“The deal demonstrates our support of open and horizontal models in a global financial ecosystem, where firms are looking for clearing solutions to alleviate their capital burden.
“We’re thrilled to continue our work as a shareholder of LCH.Clearnet and as strategic partner in the European listed derivatives space.”
LCH recently launched a new FX clearing service called ForexClear. The new service aims to mitigate counterparty risk a problem highlighted after the Lehman debacle. The service accepts non deliverable currencies including; BRL, RUB, INR, CNY & KRW.