LCH has announced
today that Commonwealth Bank of Australia (CBA) has become its first Australian
Protected Payments System (PPS) bank.
Australian PPS bank enables LCH to make and receive Australian dollar payments
in the local time zone.
system is the method by which LCH calls and pays cash margin to its clearing
members. As part of the membership criteria for LCH, members are required to
maintain a PPS bank account.
by the Bank of England, PPS has been in operation in London for over 20 years,
and also operates in New York.
follows the establishment of LCH’s central bank account with the Reserve Bank
of Australia in 2015, and the firm says that there is the potential to add more
Australian banks to the system in the coming months and widen participation to
“Signing Commonwealth Bank of Australia as our
first Australian PPS bank generates more flexibility in making and receiving
cash payments in the local timezone. Asia Pacific is a region of strategic
importance for LCH and we understand the importance of engaging with local
partners to offer the best possible service to our members and their clients,”
says Gerard Smith, director of collateral services at LCH.
Andrew Hinchcliff, executive general manager, markets,
at Commonwealth Bank of Australia, adds: “We’re delighted to be the first
Australian bank to offer PPS services to LCH. Clearing has gained significant
momentum in Australia in recent years and this initiative makes posting cash
collateral at LCH more flexible than ever before.”