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Australian markets to benefit from competition in clearing

LCH.Clearnet Group will extend its clearing business for OTC interest rate instruments to Australian banks. 

LCH.Clearnet will apply for an Australian clearing and settlement facility licence that would enable it to offer its SwapClear OTC interest rate swap clearing to Australian banks, allowing them to join the existing services used by 70 international bank members.

Four of Australia's five domestic banks have submitted letters of intent to use LCH.Clearnet's SwapClear to clear interest rate swaps.

LCH.Clearnet’s SwapClear service currently clears AUD3.9trn in Australian dollar denominated swaps, and the international members of the service have expressed strong support for SwapClear's expansion in Australia. 

"LCH.Clearnet is excited by the possibilities of expanding in the Australian market and is very interested in continuing to pursue opportunities with Australia-based clients," says Ian Axe, LCH.Clearnet Group chief executive. "While all business plans are subject to regulatory approval, our discussions with the Australian regulators continue to be very positive, and we are planning to submit our application in the first quarter of next year."

LCH.Clearnet's decision whether to offer clearing for cash equities in Australia will depend on the outcome of the Council of Financial Regulators work on competition in the clearing and settlement in this market.

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