Bilateral Margining Driving new Member Activity at ForexClear


LCH – London –  LCH, a leading global clearing house, announced today that its ForexClear service has seen 10 entities turn to actively clearing FX non-deliverable forwards in the past six months. A leading NDF clearing service in the market, ForexClear has experienced a significant rise in cleared notional and trade count in 2016, with over $220 billion in notional cleared to date in September 2016. As of 23 September,  over $1 trillion in notional has been cleared in 2016.

Daniel Maguire, Global Head of Rates and FX Derivatives, LCH said: “The uncleared margin rules that are coming into force across the world have been a catalyst for driving eligible and appropriate derivatives trades towards central clearing. LCH is committed to working with the market and helping our customers to navigate the constantly changing regulatory landscape while safely managing their risk and also achieving capital, collateral and margin efficiencies through central clearing.” Paddy Boyle, Global Head of FX Product, LCH added: “These factors have contributed to the notable uptick in the number of members actively clearing NDFs at ForexClear and the subsequent rise in volumes going through the service.”

James Bindler, Global Head of G10 FX, Citi, said “As banking groups around the world continue to manage an increasingly complex framework of ratios, balance sheet metrics and margin financing costs, central clearing is one of the few available mechanisms capable of providing relief to sell-side institutions.  Central clearing is highly effective in reducing margin financing costs and helps to optimize other balance sheet metrics and ratios.”

Frederic Boillerau, Global Head of FX and Commodities, HSBC, said: “We’ve been a strong advocate of FX clearing and an active user of ForexClear since the service launched. We are therefore pleased to see many of our bilateral counterparts also moving into central clearing, further reducing our counterparty risk and simplifying our operational processes in the NDF space.”

Markus Schmidt and Geoff Kot, Co-Heads FX Cash, Standard Chartered, said: “Our keen interest in NDF clearing, particularly for Asian currencies, stems from our strong presence in the region. ForexClear covers all our major currency pairs, offers a 24 hour service and is able to clear trades in a matter of seconds.  This is vital for our FX business, which spans multiple regions and timezones.”

Operational since 2012, ForexClear is the leading provider of clearing services for foreign exchange products. The service covers the 12 most actively traded currency pairs in the NDF market, accounting for 95% of that market.

Related articles

  1. CEDX is planning to expand its range of products in 2023, subject to regulatory approvals.

  2. The CFTC regulated derivatives market and clearer was not included in FTX's bankruptcy filing.

  3. Schroders cleared NDF trades across a Asian and Latam currency pairs via Citi.

  4. The derivatives venue owned by FTX wanted to offer products that were not fully collateralized.

  5. Trading Europe From ‘Across the Pond’

    Cboe acquired EuroCCP on 1 July 2020.