LCH.Clearnet SA has launched clearing for Spanish government bonds and repos, clearing more than 4 billion in notional volumes its first day, December 17.
The new service is operated by LCH.Clearnet SAs bond and repo service with trades settling at Iberclear, the local CSD. Initially, trades will be accepted via ICAP, with other trading platforms to be connected early in 2011. LCH.Clearnet SA has 12 years experience clearing French and Italian debts.
The offering complements LCH.Clearnet Limiteds RepoClears Spanish debt service launched August 9, which allows trades to be settled at either Clearstream Banking Luxembourg or Euroclear bank, the international CSDs.
Spanish bonds are accepted by LCH.Clearnet SA as collateral to cover margins. A direct account with the Bank of Spain can also be used by Spanish clearing members to facilitate the payment of cash movements. Cross margining is applied between French, Italian and Spanish debts.
There has been strong demand from the Spanish trading community for us to launch this service which allows settlement in Iberclear, the Spanish CSD, says Christophe Hmon, CEO of LCH.Clearnet SA. Clearing members using the service will benefit from reduced counterparty risk and trading anonymity amongst others benefits. Over 10 clearing members are already using the service and cleared over 4 billion in notional volumes on first day.