SwapClear Announces U.S. $34 Billion Cleared in Client Business in January 2012; $28 Trillion in Total Notional also Cleared in January

NEW YORK, Feb. 6, 2012 /PRNewswire/ -- LCH.Clearnet Limited's (LCH.Clearnet's) market-leading interest rate swap (IRS) clearing service, SwapClear, today announced that in January it cleared U.S. $34 billion in total notional client business across seven of the 17 currencies currently available. These volumes bring the total client notional outstanding to $288 billion. During this period, SwapClear also cleared $28 trillion of total notional business.

An advocate of compression, SwapClear tore up $10.8 trillion of cleared transactions in January through multilateral trade compression, taking its overall total compressed trades to $99 trillion in USD, EUR, GBP and JPY cleared IRS. 

"The continued growth in client volume before any mandate has been enacted confirms the buy-side's desire to capitalize on the risk management benefits of OTC clearing," said Michael Davie, CEO of SwapClear. "We are dedicated to providing a truly competitive offering that is fully aligned to the needs of all clients.  These impressive volumes validate our superior approach to risk management and commitment to world-class client service." 

SwapClear was launched in 1999 by LCH.Clearnet, a CFTC-regulated derivatives clearing organization since 2001. The one million trades in SwapClear have a total notional value of more than USD 289 trillion. SwapClear clears 17 of the world's largest currencies and its membership currently stands at 61.

About LCH.Clearnet

The LCH.Clearnet Group is the leading independent clearinghouse group, serving major international exchanges and platforms, as well as a range of OTC markets. It clears a broad range of asset classes, including securities, exchange-traded derivatives, commodities, energy, freight, interest rate swaps, CDS, and euro- and sterling-denominated bonds and repos, and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.

A clearinghouse sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When a trade is registered with a clearinghouse, that clearinghouse becomes the legal counterparty to the trade, ensuring financial performance of the trading parties; if one of the parties fails, the clearinghouse steps in. By assuming the counterparty risk, the clearinghouse underpins many important financial markets, facilitating trading and increasing confidence within these markets.

Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearinghouse's highly experienced risk management teams, which assess a member's positions and market risk on a daily basis. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times. LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.

SOURCE LCH.Clearnet