LCH.Clearnet is moving to meet regulatory demands for improved risk management in the over-the-counter derivatives markets by extending its interest rate swap clearing service, SwapClear, to the broader buy-side trading community.
The new client clearing service is scheduled to be launched in the second half of 2009. LCH.Clearnet says it will follow the current clearing model, but will have additional functionality to support the segregation of client portfolios and margin. Clients will be able to access the service through a SwapClear clearing member, thereby reducing counterparty credit risk.
“The broadening of SwapClear’s offering to include buy-side trading clients will significantly increase the proportion of important entities able to access clearing in the rates market,” says Joe Reilly, director of SwapClear, LCH.Clearnet. “We are working hard with our membership to produce a solution that is supported both by the key liquidity providers in the market and the buy-side, thereby ensuring our offering is fully attuned to the whole market’s needs.”
L.D.