The Australian government has granted LCH.Clearnet an extension to its existing clearing and settlement facility licence enabling it to offer its SwapClear OTC interest rate swap clearing service directly to Australian banks.
As members of SwapClear, Australian banks will now be able to participate alongside international clearing members, enabling them to mitigate counterparty risk through clearing and realise greater portfolio netting efficiencies.
International banks operating in Australia are already actively clearing interest rate swaps through SwapClear and now, as a result of this licence, Australian banks will be able to join them as direct clearing members, subject to UK regulatory approval.
SwapClear currently clears over 90 per cent of the global cleared interest rate swap market and is a leading provider of clearing for Australian dollar interest rate swaps. SwapClear’s members and clients benefit from access to the broadest range of OTC derivatives products and services in the greatest number of currencies offered by any CCP.
In May, LCH.Clearnet appointed Jack Drewe to serve as the local representative based in Sydney. Drewe will lead the build out of the office and SwapClear’s offering in Australia.
“We are delighted to have received approval to offer our leading OTC IRS SwapClear clearing service in Australia,” says Michael Davie, chief executive of LCH.Clearnet’s SwapClear business. “This is an important milestone for LCH.Clearnet’s long-term growth strategy in the region, and we are looking forward to working with our new members and local partners to bring greater efficiency and transparency to the Australian market.”
Eddie Listorti, co- head of FICC, ANZ Global Markets, says: “ANZ welcomes the government's decision to license LCH.Clearnet’s SwapClear business to offer clearing services for interest rate swaps in Australia. We see this as an important step for Australian financial institutions providing OTC derivatives products for their customers. We look forward to becoming a direct member of LCH.Clearnet as one of the key entities for clearing our global interest rate swaps business.”