SwapClear, the OTC interest rate swap clearing service owned by LCH.Clearnet, has cleared its millionth trade. SwapClear currently clears 64% of the global interbank interest rate swap market. LCH.Clearnet has also announced that SwapClear members have torn up $500 billion in GBP-denominated interest rate swaps, thereby eliminating them from the SwapClear service.
Twelve of SwapClears 25 members took part in the process. According to a statement from LCH.Clearnet: The elimination of superfluous trades facilitates systems processing and reduces the administrative burden in the event of a default. The average duration remaining for the terminated trades was 11 years.
MarkitSERV, a recently formed company which combines DTCC and Markits electronic trade confirmation and workflow platforms, assisted the process by using its MarkitWire automated link to SwapClear to complete updates to dealer portfolios of cleared trades in the available three-hour window.
LCH.Clearnet employed TriOptimas triReduce, a portfolio compression service for OTC derivative dealers.
The current notional value of trades in SwapClear is $206 trillion.
Giles TurnerNews Editor