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LCH Shows Initial Traction in G10 NDF Clearing

LCH says it has cleared a total of $745 million of G10 FX NDF currency pairs less than one month after the products went live on its ForexClear service.

 The new NDF currency pairs reflect the five most actively traded G10 currencies: Australian dollar, euro, Japanese yen, pound sterling and Swiss franc, against the US dollar. LCH says that expanding ForexClear’s coverage to incorporate these pairs increases opportunities for capital optimisation by increasing the number of products eligible for clearing at LCH.

Paddy Boyle, global head of ForexClear, LCH, says: “We’re pleased with the strong adoption to date of this product among our active membership. Since the advent of the uncleared margin rules in 2016, we’ve seen a tremendous surge in NDF clearing. Now that we have expanded our product set into the G10 currencies, we anticipate continued take up among our members and their clients as they seek to use their capital in the most efficient way.” 

Mike Curtis, managing director, business resource management at Nomura, comments: “This gives Nomura another valuable tool for reducing bilateral SIMM FX risk and the costs from its associated initial margin. We have used LCH cleared G5 FX NDFs in multilateral risk reduction runs and also for bilateral risk reducing trades. They are very helpful when used in conjunction with large FX option customer novations.”

The expanded ForexClear service now clears 17 currency pairs, incorporating emerging market currencies.

Galen Stops

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