MARKET INFRASTRUCTURE

LCH SwapAgent processes first trades from Citi and Deutsche Bank

The new business aims to standardise post-trade processes for non-cleared OTC derivatives.

By Hayley McDowell hayley.mcdowell@strategic-i.com September 07, 2017 11:25 AM GMT
Citi and Deutsche Bank have become the first counterparties to execute trades via LCH’s SwapAgent service.

The investment banks acted as counterparties to the Swiss Franc-denominated interest rate swap and Euro-denominated inflation swap, having processed the trades through MarkitSERV.

LCH SwapAgent - a service for non-cleared OTC interest rate derivatives - now has 14 dealers including Barclays, Citi, Credit Suisse, Goldman Sachs, Morgan Stanley and JP Morgan.
 
Nathan Ondyak, global head of LCH SwapAgent, explained the clearing business has seen significant support from the market.

“Through LCH SwapAgent we can extend the efficiencies of centralised clearing to the non-cleared market and we look forward to expanding this offering to include products such as cross-currency swaps in due course,” he said.
 
Stuart Bancroft, managing director of CVA trading at Citi, added as the non-cleared market for interest rate derivatives becomes more complex, solutions like LCH SwapAgent are welcomed.

“We welcome innovative solutions like LCH SwapAgent that help simplify the bilateral margining process, while enabling market participants to comply with the uncleared margin rules,” he said.