A record number of over-the-counter (OTC) interest rate swap (IRS) trades were cleared in Q2 2010 by LCH.Clearnet Limited’s (LCH.Clearnet) market leading IRS clearing service, SwapClear. The total number of trades for the quarter reached 191,694 trade sides, a 30% increase on Q2 2009, driven by record volumes in May of 73,440 trade sides. The increased figures bring the total outstanding amount of IRS transactions to USD224.6 trillion.
Established over ten years ago, SwapClear’s membership has increased significantly to 32 direct members and the product scope has grown to cover the world’s 14 largest currencies with tenors up to 50 years in USD, EUR and GBP. The only truly global clearing service for IRS, SwapClear now clears over 40% of the market.
Joe Reilly, director, SwapClear said: "SwapClear was developed to provide a global solution for the IRS market. For ten years now it has delivered a secure, reliable and efficient environment for processing trades. The growing demand for the service and these impressive volumes demonstrate just how effective the SwapClear clearing model is.”
The resilience of SwapClear’s default management process was demonstrated in September 2008 when it successfully handled Lehman Brothers’ USD9 trillion interest rate swap default. The highly effective default management process ensured that over 60,000 trades were hedged and auctioned off to other clearing members in a timely fashion and that the default was managed well within Lehman Brothers’ margin held and with no recourse to the default fund.
LCH.Clearnet is both a Financial Services Authority (FSA) Recognised Clearing House and a Commodity Futures Trading Commission (CFTC) registered Derivatives Clearing Organization (DCO).
