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LCH offers repo clearing on German debt

First Published 29th March 2017

LCH extends RepoClear service to offer clearing for cash and repo trades on German government securities.

Christophe Hémon, LCH

Christophe Hémon, LCH

LCH has extended its RepoClear service to offer clearing for cash and repo trades on German government securities via LCH SA, its continental Europe-based entity. This complements the existing service at LCH SA which already clears trades on Italian, French and Spanish government securities and will provide choice for members as to where to clear their trades. The availability of clearing trades on German debt will also continue to be offered through LCH Ltd, the Group's UK entity.

The new offering covers trades on German government and regional debt, and Jumbo Pfandbriefe, allowing members clearing these products to net their positions with other European transactions cleared at LCH SA and settled through TARGET2-Securities , the European platform for securities settlement. Members are able to use Clearstream Bank Frankfurt, or Euroclear France as their central securities depository, or Euroclear Bank as a settlement agent.

Christophe Hémon, CEO, LCH SA, said: "As a clearing house we are consistently looking for ways to reduce our members' risk. Netting is a very efficient way of reducing banks' balance sheet usage and mitigate potentially costly capital requirements. The implementation of T2S brings with it an opportunity to expand the number of European trades eligible for balance sheet netting, providing greater operational and capital efficiency for our members. It will also allow our members to benefit from potential margin savings thanks to risk offsets among four main European debts."