The London Metal Exchange (LME) has launched its new clearing house, LME Clear, migrating all of the positions of LME members from previous clearer LCH.Clearnet Ltd to its own risk and clearing system, LMEmercury.
“The successful launch of LME Clear is a fantastic achievement and an important milestone in the LME's development. Building LME Clear was an important strategic decision because it not only provides the LME immediate and substantial revenues, but also gives the LME and the group the ability to pursue new markets, new products and new capabilities, particularly in extending the LME franchise to Asian time zones and in adding RMB capabilities,” says Charles Li, chief executive of LME Clear’s parent company, Hong Kong Exchanges and Clearing Limited (HKEx).
“We are thrilled with the successful roll-out of LME Clear, and are grateful for the support our members have given us as we’ve sought to improve the way central counterparty services are provided to the metals community,” says Trevor Spanner, CEO of LME Clear. “As a start-up, we have been able to build our clearing house from scratch, assembling an impressive team of experienced clearing professionals, and delivering exciting and leading-edge technology.”
LME Clear will initially clear all trades on the LME. LMEmercury enables members to view their risk positions in real time, offering straight-through processing, integrated collateral management and a range of comprehensive reports. It also features enhanced option expiry handling.
Looking ahead, LME Clear will focus on adding more exchange and over-the-counter contracts, services such as Asian time zone coverage, and non-cash collateral such as LME warrants. In keeping with the LME’s growing focus on Asia, it also plans to introduce RMB as cash collateral later this year, subject to regulatory approval.