LCH.Clearnet Limited’s interest rate swap (IRS) clearing service, SwapClear, announced that more than one trillion dollars in buy-side client notional volumes have been cleared on its market-leading platform. Activity has intensified in the run-up to regulatory reform, as clients capitalize on the benefits of counterparty risk reduction, and operational and capital efficiencies.
By acting in advance of the clearing mandate for over-the-counter derivatives, buy-side institutions have a number of other advantages, including the capacity to tap into an unrivaled dealer liquidity pool of more than USD 300 trillion notional outstanding. Other benefits include market-standard pricing, operational simplicity, and the ability to refine and optimize clearing solutions for the upcoming change in market structure.
“We are delighted to see such significant buy-side activity in advance of regulatory clearing mandates,” said Michael Davie, ceo of SwapClear. “By moving now, institutional clients are taking full advantage of a more robust infrastructure and the cost and efficiency gains of an orderly transition.”
“Every month this year we’ve seen an increase in the number of clients initiating their clearing process. Those buy-side participants who move to a clearing environment early are able to optimize their infrastructure and begin reaping the benefits of centralized clearing ahead of regulatory deadlines,” said Ray Kahn, head of OTC derivatives clearing at Barclays.
Clients are actively clearing with SwapClear in all major time zones. A third of all buy-side clearing activity on the platform took place in May 2012, following a marked jump in activity in March and April this year. So far, buy-side clients have cleared trades through their clearing members in eight of the 17 currencies available. SwapClear is the world’s leading clearing house for interest rate swaps, and the only one to have successfully overseen a major swaps default.