SwapClear

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SwapClear
SwapClear.jpg
Founded 1999
Headquarters London
Key People Susi de Verdelon, CEO; Daniel Maguire, head of LCH
Products Clearing
Website www.swapclear.com

SwapClear is the clearing arm of LCH (formerly LCH.Clearnet). It was launched in September 1999 to provide clearing for plain vanilla interest rate swaps of up to 10 years maturity in USD, EUR, JPY and GBP. Its range of products has since been expanded to include a full range of major currencies and indices. [1]

SwapClear was the world’s first OTC clearing service. It is currently the largest swaps clearing book and clears about 50 percent of the global interbank market. It successfully managed Lehman’s $9 trillion interest rate swap portfolio in September 2008. In 2011, the outstanding notional value of interest rate swap trade sides within SwapClear increased to $295 trillion. Wells Fargo announced its intention to join SwapClear on June 9, 2011, bringing the total number of clearing members within SwapClear to 54.[2]

On March 8, 2011, LCH launched SwapClear FCM Service, a platform for the clearing of OTC swaps. The platform was created in anticipation of new Dodd-Frank-related regulations, which stipulate that swaps "eligible for clearing" be cleared via a swap execution facility. On July 27, 2011, asset management giant BlackRock announced that it had cleared its first two interest rate swap contracts on SwapClear.[3]

SwapClear provides multilateral netting and uses daily margining.

On March 4, 2015, LCH announced that SwapClear would be launching new interest rate portfolio margining capabilities for LCH.Clearnet members and their clients around the world. Market participants using SwapClear and LCH.Clearnet's listed rates service will be able to maximize their margin offsets between OTC and listed interest rate derivatives. The initiative is expected to go-live within 12 months.[4]

Products and Services

From the LCH.Clearnet website--

14 Currencies eligible for clearing through SwapClear:USD, EUR, JPY, GBP, CHF, AUD, DKK, CAD, HKD, NOK, NZD, SEK, PLN and ZAR.

  • Both Libor and Fed Funds Indices
  • USD, EUR and GBP IRS out to 50 years
  • AUD, CAD, CHF, SEK and JPY Vanilla IRS out to 30 years
  • HKD, NOK, DKK, NZD, PLN and ZAR IRS out to 10 years
  • USD, EUR, GBP, CHF Overnight Index Swaps (OIS)
  • Compounding Swaps
  • T+0 Clearing
  • Trade Compression for Inter-dealer trades
  • Trade Backloading – Legacy IRS portfolios can be cleared

Key People

References

  1. Swaps. LCH.Clearnet.
  2. Wells Fargo to join LCH.Clearnet’s SwapClear service. LCH.Clearnet.
  3. LCH.Clearnet Clears OTC Trades For BlackRock. Futures Magazine.
  4. LCH.Clearnet to launch interest rate portfolio margining capability. LCH.Clearnet.