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NYSE Liffe Clearing Gets FSA Nod to Launch July 27th

NYSE Liffe will act as a central clearing counterparty for the London derivatives market through an agremement with LCH.Clearnet.

NYSE Liffe, the international derivatives business of NYSE Euronext, has received approval in principle from the Financial Services Authority (FSA) to launch NYSE Liffe Clearing, its central clearing counterparty for its London derivatives market, Liffe Administration and Management.

NYSE Liffe Clearing is slated to begin operating on July 27th subject to review of proposed documentation (i.e., Amendments to Rules and Clearing Arrangements), which incorporates the new arrangements and the finalization of tax relief with HM Treasury.

The regulatory approval follows the October 2008 follows the October 2008 binding agreement entered by NYSE Liffe and LCH Clear.net Ltd to establish NYSE Liffe Clearing. This enabled Liffe to become a self-clearing Recognized Investment Exchange and act as central counterparty for the London derivatives market and manage its own London clearing operations directly. Under the NYSE Liffe Clearing arrangements, Liffe will continue to outsource the existing clearing guarantee arrangements and related risk functions to LCH.Clearnet, which will remain responsible for defaulting member positions and applying its rules and resources to resolve defaults, if they occur, stated the release.

“We are very pleased to have received approval from the FSA for NYSE Liffe Clearing. The new clearing arrangements will enable us for the first time to forge a direct clearing relationships with our London market customers while continuing to build on our long-standing relationship with LCH.Clearnet,” commented Garry Jones, Group EVP & Head of Global Derivatives at NYSE Liffe. This change will involve minimal disruption for our customers, who will benefit from our new ability to invest in and swiftly deliver, clearing services that meet their changing needs,” further stated Jones in the release.

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

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