Citi Clears First U.S. Client Interest Rate Derivatives Trade on LCH.Clearnet

Citi has cleared its first U.S. client interest rate derivatives trades through LCH. Clearnet.

In Europe, Citi has been clearing for clients on the LCH.Clearnet model for interest rate swaps since December 2009. But the bank said it’s one of the first Futures Commission Merchants (FCMs) to clear interest rate swap trades for a U.S. client, which reflects the bank’s commitment to a consolidated, global and platform-agnostic approach to central clearing. Citi has also been clearing interest rate swaps through the Chicago Mercantile Exchange (CME) since October, 2010.

LCH.Clearnet is an independent clearinghouse group servicing international exchanges and platforms, as well as a range of OTC markets.

“Citi has been working closely with LCH.Clearnet on the design of its solution for U.S. clients in accordance with the provisions of Dodd-Frank,” commented Jerome Kemp, Global Head of Derivatives Sales and Clearing at Citi in today’s release. “Our goal is to leverage our unparalleled global footprint to provide our clients with access to viable OTC clearing houses as they emerge globally in accordance with international regulation. We are now expanding clearing into Asia. ” According to Mike Zimits, Global Head of Derivatives Clearing at Citi, who is quoted in the same release, “Our objective is to become the global leader in central clearing across every viable platform, and adding LCH.Clearnet to our offering is a significant step toward that goal. Citi has more than 60 years of experience clearing futures as futures commission merchant(FCM) and we are committed to providing derivatives clearing services with this same level of excellence across any platform a client chooses.”

Citi said it views clearing as a “core offering within its franchise” and that the bank is willing to connect clients to their choice of viable OTC clearing platforms that have broad buy-side and sell-side support.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio