Membership - Ltd

Clearing Members of LCH.Clearnet Ltd (LCH.Clearnet) are major financial groups (including almost all of the major investment banks), broker-dealers, and specialist commodity houses. To be eligible for membership at LCH.Clearnet, firms must meet certain minimum net capital requirements depending on the products to be cleared. LCH.Clearnet Clearing Members are of a high credit quality and have large financial resources.

Please use the headings below to obtain further information regarding the minimum acceptance criteria and application process for Clearing Members.

Criteria

Minimum acceptance criteria for Clearing Members includes:

minimum levels of net capital: Section 1.9 of the Rulebook;
appropriate banking arrangements: Section 3 of the Rulebook;
staff of sufficient experience and knowledge of the products being cleared;
appropriate systems to manage their clearing activities;

On some of the markets there are minimum rating requirements, please refer to section 1.2 of the Rulebook.

For full Clearing Member status criteria, refer to the Rulebook: 1 - Clearing Member, Dealer and Other Non-Clearing Member Status.

For SwapClear FCM applicants refer to regulation 3 of the Rulebook - FCM Rulebook.

All applicants for Clearing Member status must sign binding legal agreements with LCH.Clearnet.

All applicants are required to have the appropriate exchange memberships in place.

Costs

Application fee of £1,500.00 (+ VAT for UK applicants).

Completion of Application Documentation

All new applicants are required to complete and sign both the Clearing Membership Agreement and the Application for Clearing Member Status form and return with the accompanying documentation listed. Other legal documents will be required dependant on the market(s) applied for.

Clearing Membership Agreement

FCM Clearing Membership Agreement

Membership Application Form

Due Diligence Visit

The application process for new Clearing Members may include a due diligence visit at the applicant's offices. The purpose of this meeting is to discuss corporate structure and strategy; the scope of the new Clearing Member's business generally and clearing activities specifically (planned and current); financials; regulation; operational processes; banking facilities, and risk management (of clients and any proprietary business, margining, credit management policy, stress testing, etc.).

Risk Management Executive Committee (RMEC) Approval

Following the due diligence visit, Clearing Member applications will be reviewed and approved by the LCH.Clearnet RMEC.

Implementation (Connectivity/Testing)

Connectivity and testing requirements will vary by market. Further information can be obtained from the Member Technical Implementation team membertechnicalimplementation@lchclearnet.com.

Training

LCH.Clearnet requirements state that at least two personnel are fully conversant with clearing procedures, and detailed training will be provided free of charge for all new Clearing Members. For further details of training, please refer to the Training Programme which can be found here. Queries you may have relating to training can be sent to trainingandeducation@lchclearnet.com.

Default Fund Contribution

Clearing Members must contribute to the Default Fund, which is split, for contribution purposes only, into four segments.

The minimum initial contribution will be called from the applicant's GBP House PPS account one business day prior to go-live as follows:

Exchange - £100,000

EquityClear - £1,000,000

RepoClear - £1,000,000

SwapClear - £2,000,000

Contributions are then recalculated quarterly on 1st business day in February, May, August and November.

For further details please refer to the Default Fund Rules which can be found here.

Go-Live

Successful applicants will agree a go-live date with LCH.Clearnet, by which time all requirements will have been met.

Timescales

Once a full and complete application pack has been received at LCH.Clearnet, the approval process will take approximately six weeks.

Contact Us

For further information please contact the Membership team on:

+44 (0)20 7426 7949

Or by email to membershipteam@lchclearnet.com

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