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LCH.Clearnet Sees Surge in Buy Side Activity

In the run up to Dodd Frank's March 11 deadline for mandatory central clearing,LCH.Clearnet experienced a record month in February, clearing over $22 trillion notional interest rate derivatives for 73 buy-side clients.

LCH.Clearnet Limited has cleared over $22 trillion notional of interest rate derivatives through its SwapClear service for buy side clients as the activity intensified in the run up to Dodd-Frank’s mandatory clearing deadline taking effect on March 11.

In February, LCH.Clearnet had a record month with 73 buy-side clients clearing 7.650 trades in 15 different currencies across a broad product set which includes forward rate agreements, amortizers and overnight index swaps, the clearing house reported in today’s release. Buy side participants had access to the SwapClear’s portfolio margining risk management approach, resulting in margin efficiency.

SwapClear processes trades for a broad array of client types in the U.S. and 17 other jurisdictions including asset managers, hedge funds and regional banks.

"We are pleased with the surge in buy-side activity, but more specifically we are encouraged by the volume of trades, as this is the real indication of the market’s readiness for central clearing,” commented Daniel Maguire, Head of SwapClear in the U.S., in the release.

SwapClear, which already clears over 95 percent of the world’s cleared interest rate swaps, said it can accommodate the influx of buy-side activity and their clearing needs because it has invested heavily in the last three years in its risk, operations and technology architecture. In 2013 to date, an average of $2 trillion notional and 9,200 trades have been cleared daily on SwapClear by market participants.

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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