HSBC and J.P. Morgan have become shareholders of OTCDerivNet, the company which provides strategic direction to LCH.Clearnet’s SwapClear service. SwapClear currently clears around 50 per cent of the USD 140 trillion global interbank OTC interest rate market* and its members include many of the world’s leading banks.
Stephen O’Connor, managing director, Morgan Stanley and Chairman of OTCDerivNet said: "We are very pleased to welcome HSBC and J.P. Morgan to OTCDerivNet at this time. The support of these two key institutions will significantly help the expansion and oversight of the SwapClear service. The clearing of OTC Derivatives through a strong central counterparty is critical to the reduction of systemic risk in the marketplace.”
Chris Willcox, global head of Rates Trading at J.P. Morgan said "At J.P. Morgan we view the LCH.Clearnet’s SwapClear derivatives clearing service as a vital component of the OTC Rates industry. We see the service as a key enabler in supporting greater capacity and improved efficiencies in the Rates market."
Elie El Hayek, global head of Rates at HSBC said. “The partnership between OTCDerivNet and LCH.Clearnet has created a significant asset for the industry. HSBC is very pleased to be part of a group committed to developing the SwapClear service.”
Roger Liddell, chief executive, LCH.Clearnet said: “A key factor in the outstanding success of the SwapClear service, which now accounts for circa 50 per cent of the OTC global inter-bank interest rate swap market, is the close collaboration with the industry through OTCDerivNet. Their input to the service’s development and the default management process is invaluable and enabled us to so successfully handle the default on Lehman’s OTC interest rate swap book.”