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LCH.Clearnet clears world’s first 50-year trades

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LCH.Clearnet has extended its SwapClear offering by clearing the world’s first 50-year interest swap trades.

Market participants can now clear IRS trades denominated in USD, EUR and GBP with maturities of up to 50 years. The move brings greater efficiency and security to the OTC derivatives market, a key area of focus for regulators and legislators worldwide.

In addition, LCH.Clearnet has extended maturities for IRS trades in AUD, CAD, CHF and SEK to 30 years. The company has also extended global operating hours from 02:30 to 17:00 EST (07:30 to 22:00 GMT), giving global market participants the capability to register trades for clearing throughout the UK, European and New York business day.

“We are leading the way in reducing systemic risk from the OTC markets by significantly extending the length of trades eligible for clearing," says Joe Reilly, director of SwapClear, LCH.Clearnet. "The OTC market is one of the fastest growing areas of our business, with IRS volumes rising steadily and new members joining SwapClear regularly. This highly innovative service, which has led the way in OTC clearing for ten years, is well placed to meet the current global demand and also the strong market demand we expect to see continuing in the future.”

Three new clearing members have recently signed up to SwapClear, bringing the total number to 28. In December 2009, LCH.Clearnet was the first clearing house to launch interest rate swap clearing for the buy-side through SwapClear, offering a unique level of security to buy-side clients in the case of a bank default through margin segregation and portability of contracts.

SwapClear continues to consolidate its position as the leading global service for IRS, clearing over 40% of the USD342 trillion global market, across 14 currencies. Since launch, in 1999, the service has cleared over 1 million trades.

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