Tag: LCH Clearnet

LCH Clearnet

Predicting the Impact of Brexit

Speaking at the Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee (MRAC) meeting today in Washington, a range of market participants weighed in on the expected impact of Britain’s exit from the European Union

Eileen Kiely, director at BlackRock, said that markets are currently in a period of low volatility – both implied and realised across asset classes globally – and that she does not expect Brexit to disrupt this trend. This is in part because Kiely believes that markets are currently pricing the risks associated with Brexit appropriately.

IHS Markit Reports Spike in NDF Clearing

IHS Markit says that in 2017 it has processed a monthly average of 54,000 NDF contracts via Markitserv, a 920% increase compared to the same period last year.

“NDF clearing has seen strong interest as a response to the uncleared margin rules and other market factors,” says William Black, US head of OTC derivatives clearing at Credit Suisse. “We are proud to bring a scalable solution to this space and look forward to partnering with non-member clients as the market continues to develop.”

LCH Appoints Maguire as COO

LCH Clearnet has appointed Daniel Maguire as its COO, effective immediately. He assumes this role in addition to his current responsibilities as global head of rates and FX derivatives.

In a statement issued today, LCH says that as COO Maguire will be responsible for achieving new business growth, maintaining existing customer relationships and driving innovation and efficiency across the group, while ensuring LCH’s risk and resilience is fully safeguarded.

In his new role, Maguire will also be responsible for the development of an integrated global product strategy and its execution, working in partnership with the CEOs of LCH’s regulated CCPs, the group chief risk officer and other relevant function heads.

ForexClear Sees Record Activity in October

ForexClear, LCH Clearnet’s centrally cleared FX operation, reported record volumes in October, driven in large part by activity in Latin American currencies.
The CCP cleared $500 billion in notional in October, with over 20,000 trades cleared in just one week and almost 80,000 cleared during the entire month.
By contrast, in July less than 20,000 contracts with a notion value of less than $125 billion were cleared at the CCP.
ForexClear says that while an increase in Asia currency NDF volumes helped drive this growth, Latin American currencies saw and even greater increase in activity, with $64 billion of BRL fixing at the end of the month.

Compression Comes to FX

As leverage requirements make FX exposures a bigger pain point for the banks, many are looking towards compression services to solve for this. Galen Stops looks at how these services work and what they could mean for the industry.

One of the responses by global regulatory bodies to the 2008 financial crisis was to require banks to hold more capital against their financial exposures, creating a bigger buffer to protect them against adverse market conditions.

Capital constraints have widely been cited as a reason for declining activity in some markets and liquidity events in other, therefore it is not surprising that compression services, whereby offsetting trades are netted off against one another to reduce the notional amount on banks’ balance sheets, have found favour amongst banks and major dealers.

Saidi Takes Risk Modelling Role at Credit Suisse

Sofiane Saidi has returned to New York to take up the role of director, risk modelling, at Credit Suisse.

Prior to this appointment, Saidi spent over three years at LCH Clearnet, helping to build out the clearing house’s NDF and FX options product capabilities.

Originally he was based in New York for this role, but he moved to London after the partnership between LCH Clearnet and CLS to facilitate FX options clearing was announced.

Profit & Loss reported in August that Saidi would be leaving LCH Clearnet for a banking position in New York.

Wright Appointed to LCH Board

Graham Wright has joined the LCH Limited board as an independent non-executive director. Wright is currently the chief information security officer and global head of digital risk for National Grid.

Prior to this, he has held a number of senior roles relating to cyber security and intelligence for the UK’s Ministry of Defence and in the private sector. These positions follow a career as an operational pilot and senior officer in the Royal Air Force.

Lex Hoogduin, group chairman of LCH, comments: “I am delighted to welcome Graham as an independent non-executive director to the LCH Limited board. He brings exceptional knowledge of the technology and operations space and the Board will benefit greatly from his experience in this area.”

CCP Risk, Resolution, Recovery Back in the Spotlight

Three papers have been released focusing on central counterparty (CCP) risk and how CCPs should be resolved or recovered in the event of a failure. The Committee on Payments and Market Infrastructures (CPMI) together with the International Organisation of Securities Commissions (Iosco) has issued a consultative report providing further guidance on certain aspects of the […]

Saidi Set to Depart LCH Clearnet

Sofiane Saidi is set to leave LCH Clearnet, where he currently works in NDF and FX options product development, according to market sources. Profit & Loss understands that although no official date has been set for Saidi’s departure from the firm, he has already agreed to take a position at a major investment bank in […]