LCH has announced that 2019 was a record year for volumes across multiple asset classes, including FX.
Over $18 trillion in notional value was cleared by ForexClear, LCH’s FX derivatives clearing service, in 2019. This represents a 5% increase from the previous year. Of this total, $60.5 billion was client cleared notional, a sixfold increase from 2018.
In October 2019, deliverable FX Forwards became the latest products to be cleared at ForexClear, with cleared deliverable notional accounting for $456.47 billion in 2019. LCH says that this is nearly 13 times the amount cleared in 2018, although it should be noted that this was a low base to begin with.
The clearing house says that FX compression volumes also gathered momentum last year with $48 billion in notional compressed over the year, over 10 times the amount for 2018.
In a release issued today LCH says that it anticipates cleared FX volumes increasing further in 2020 as phase five of the uncleared margin rules (UMR) come into effect in September. This phase of UMR will require firms trading an aggregate notional daily amount of $750 billion or more of swaps, including FX forwards and FX swaps, to post initial margin for these swaps products unless they are centrally cleared.
Elsewhere, LCH’s SwapAgent non-cleared derivatives service saw growth in its cross-currency swaps offering, with $726 billion processed during 2019. SwapAgent now has 16 members live and actively using the service.
“2019 has been another successful year for LCH with record levels of activity across many of our services. We’ve continued to collaborate with the market to launch efficient and resilient solutions to support our customers’ risk management and capital efficiency. As we move into 2020, LCH, and the LSEG post-trade division as a whole, is looking forward to continuing to partner with the market to foster further innovation and enable compliance with regulatory reforms, including the migration to alternative reference rates,” says Daniel Maguire, CEO of LCH and group director, post-trade at the London Stock Exchange Group (LESG).