Michael Davie has been appointed to the new role of CEO of SwapClear, LCH.Clearnets interest rate swap (IRS) clearing subsidiary. Davie was previously CFO of global sales and marketing at J.P.Morgan. Joe Reilly, director of SwapClear, will report to Davie.
The appointment of Davie signals LCH.Clearnets intent to corner the U.S. IRS clearing market. In June 2010, LCH.Clearnet announced it would offer Swapclear to U.S. clients by late 2010. By offering Swapclear via a Futures Commission Merchant model to U.S. clients, LCH.Clearnet hopes to tap into U.S. regulation that will force many derivatives through clearing houses. Established in 1999, SwapClear already clears over 40% of the global IRS market.
Roger Liddell, chief executive of LCH.Clearnet said; Clients represent a large proportion of the global interest rate swap market. Michaels appointment reflects our commitment to delivering OTC derivative clearing services to the buy side and of ensuring that SwapClears market leading offering evolves in line with their needs.
LCH.Clearnet suffered a 91 million loss in 2009, down 310 million year-on-year. NYSE Euronext, a major client of the clearer, recently announced the launch of two new clearing houses in London and Paris by late 2012, severing its existing clearing arrangement with LCH.Clearnet, and Xavier Rolet, the LSE CEO, has also announced that he was reviewing his firms relationship with the firm.
As a result, LCH.Clearnet has been proactive in expanding new lines of business, recently launching clearing services for Spanish government bonds and repos, and in July announcing that it had started constructing a clearing service for the over-the-counter wholesale London gold market in a joint initiative with the London Metal Exchange. In June the firm also became the first to clear over-the-counter (OTC) container freight swap agreements, and 50 year interest swap trades have been cleared for the first time by SwapClear.
Giles TurnerNews Editor