LCH.Clearnet has gone live with significant enhancements to its SwapClear service. Following extensive consultation with the buy side and Futures Commission Merchants, SwapClear now accepts a broader range of collateral for initial margin and offers increased connectivity and variable notional swaps.
In addition, the platform offers risk-free compression and flexible trade submission and is now directly accessible via TradeWeb and Bloomberg (VCON and Electronic Trading) through SwapClear’s ClearLink API in addition to MarkitSERV.
“Today’s rollout exemplifies our commitment to innovation. We engage continuously with clients and are determined to offer solutions that help them efficiently manage their IRS business,” says Daniel Maguire, head of SwapClear US. “These enhancements will support the entire buy-side community as it moves toward the adoption of centralised clearing.”
“We are excited to be working with SwapClear in order to leverage its successful interest rate clearing offering,says Michael Dawley (pictured), global co-head of Derivatives Clearing Services at Goldman Sachs. "SwapClear’s commitment to continuous development and innovation delivers a solution that is attuned to our clients’ changing risk management requirements. Managing counterparty risk is of the utmost importance, and we are therefore delighted to be providing access to this established and successful IRS clearing platform.”
According to the International Swaps and Derivatives Association (ISDA), SwapClear currently clears more than 50 per cent of all OTC interest rate swaps globally and more than 95 per cent of the overall cleared OTC interest rate swap market. SwapClear regularly clears in excess of USD1 trillion in new OTC IRS trades each day and has close to 1 million cleared trades outstanding, equating to USD290 trillion in notional open interest, including $226 billion in client clearing business.
“Enhancing the central clearing offerings is key to driving support across the entire industry,” says Raymond Kahn, head of OTC Derivatives Clearing, Barclays Capital. “Providing a multi-currency and global offering, combined with a proven track record in interest rate swaps clearing, will help to advance the adoption of OTC derivatives clearing.”
“Morgan Stanley has been working closely with LCH.Clearnet on the evolution of its US offering and believes that the current SwapClear service enhancements establish several important changes, including the expansion of SwapClear’s eligible product set and the improvement of middleware connectivity,” says Andrew Huszar, US head of OTC Clearing at Morgan Stanley. “We are pleased to participate in this rollout, given our commitment to partner actively with clearinghouses and clients in the voluntary adoption phase of OTC Client Clearing.”
