|Contact: Andrea Schlaepfer / Rachael Harper +44 (0) 20 7426 7463 / 7175|
16 June 2011
LCH.Clearnet Group Ltd (LCH.Clearnet), the leading independent clearing house group, confirms it is happy to accommodate the request from NYSE Euronext to continue to serve its European securities and continental derivatives markets after November 2012.
The new arrangement will extend the cash equities clearing notice period until December 2013 and derivatives clearing notice period until at least June 2013.
Ian Axe, Chief Executive, LCH.Clearnet said: “We look forward to continuing to support NYSE Euronext, as we have for many years, and to providing them with our world class service. In parallel, we are working with them on a longer term plan regarding cash equities’ clearing arrangements.”
LCH.Clearnet Group Limited is the leading independent clearing house group, serving major international exchanges and platforms, as well as a range of OTC markets. It clears a broad range of asset classes including: securities, exchange traded derivatives, commodities, energy, freight, interest rate swaps, CDS and euro and sterling denominated bonds and repos; and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.
A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within the market.
Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, who assess a member’s positions and market risk on a daily basis. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times. LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.