LCH.Clearnet SA (LCH.Clearnet) today announced that it successfully cleared the first credit default swap (CDS) index contracts on Monday 29 March.
Both regulators and market participants have been keen to see clearing for CDS introduced to bring security and transparency to the OTC derivatives markets. The service, launched in response to this demand, has seen tremendous support from clearing members. They have been key in developing the offering in collaboration with LCH.Clearnet to ensure that it is fully in line with market practices and meets the core requirements that have been determined by the industry and policy groups.
The introduction of clearing brings greater protection to the CDS market, enabling market participants to benefit from reduced counterparty risk, straight through processing, post-trade anonymity, and a proven track-record in risk and default management. Initially, the service covers European indices, with the intention to expand the offering based upon market demand.
Commenting on the initiative, Christophe Hémon, chief executive, LCH.Clearnet SA said, “This successful launch demonstrates our ability to deliver innovative OTC clearing solutions across LCH.Clearnet Group, the global leader in OTC clearing. The collaboration and the support of market participants have been critical in the development of this service and we look forward to working with them to enhance our clearing offering.”
