Alliance Bernstein is now actively clearing over-the-counter interest rate swaps through LCH.Clearnet’s SwapClear service. The move comes in advance of regulatory mandates in the US to clear over-the-counter derivatives.
The initial trades were executed and cleared by Citi and affirmed over MarkitSERV. These trades complement the USD1 trillion notional of interest rate swaps that have now been cleared on behalf of buy-side clients using the SwapClear service.
“Clearing ahead of the regulations makes sense for us. It means we can plan for the changes in market structure and optimise our clearing solutions in line with our portfolio requirements,” says James Wallin, senior vice president, fixed income at Alliance Bernstein.
“Alliance Bernstein is the latest in a rapidly growing and diverse group of clients to adopt central clearing. These firms are reaping the capital and operational efficiencies of being at the vanguard of change,” says Daniel Maguire, head of SwapClear US. “We are delighted that they – like the others – selected SwapClear as their clearing service of choice for our broad product range, unrivaled liquidity, and superior risk management capabilities.”
“Mandatory central clearing for some members of the buy-side is rapidly approaching, and we’re seeing many clients, like Alliance Bernstein, making an early transition ahead of regulation because they believe it makes commercial sense,” says Christopher Perkins, global head of OTC clearing at Citi. “Working with central counterparties to provide OTC clearing underscores Citi’s commitment to our clients throughout the globe, and reinforces our shared vision to increase transparency and reduce systemic risk.”
SwapClear was launched in 1999 by LCH.Clearnet, a CFTC-regulated derivatives clearing organisation since 2001. The 1 million trades in SwapClear have an aggregate notional principal amount of more than USD300 trillion, with a further USD126 trillion of cleared transactions removed through multilateral trade compression.