2022 proves 鈥渞ecord year鈥� for clearing volume at LCH
20 January 2022 UK
Image: zodar
LCH, part of London Stock Exchange Group (LSEG), has reported a 鈥渟ignificant year鈥� for LCH鈥檚 SwapClear.
LCH, part of London Stock Exchange Group (LSEG), reported that the service registered a record 8.2 million trades in 2022, up 20 per cent from 2021.
The results come ahead of the USD LIBOR conversion to SOFR in Q2 2023 鈥� with more than 80 per cent of all new USD swap risk cleared by SwapClear now SOFR-based.
Total notional cleared at the service increased 18 per cent year-on-year, with clearing of inflation swaps reaching a record notional high of US$9.3 trillion in 2022.
As testament to the progress made in the transition to risk-free rates (RFRs), LCH says cleared swap liquidity grew considerably over the year 鈥� with more than 80 per cent of all new USD swap risk cleared at SwapClear now SOFR-based. This was versus less than 10 per cent in Q2 2021.
SwapClear also supported the move to RFRs in the Nordics by extending clearing eligibility to Swedish krona short-term rate (SWESTR) overnight index swaps (OIS) and is the first to launch the clearing of Denmark short-term rate (DESTR) OIS.
Over the year, SwapClear continued to grow across Asia, registering a nearly 30 per cent year-on-year increase in notional cleared in APAC currencies, and welcomed DBS Bank as its first direct member in Singapore.
SwapAgent saw a 130 per cent year-on-year increase with over US$3.9 trillion of notional registered. Further supporting the industry鈥檚 transition to risk-free rates, SwapAgent registered its first CIBOR/SOFR cross-currency basis swap between two Nordic banks: Nordea and Danske.
Membership at SwapAgent also saw growth in 2022, increasing to 23 dealer groups and 37 entities, up from 19 groups and 33 entities at the start of the year.
Across LCH and SA, RepoClear processed 鈧�288.4 trillion of nominal across 12.1 million trade sides cleared.
LCH SA鈥檚 RepoClear also expanded its settlement connections to investor CSDs, meaning members are now able to settle Dutch Government bonds at Euroclear Netherlands and Austrian and Spanish Government bonds at Clearstream Banking Frankfurt.
In June 2022, RepoClear SA introduced a value-at-risk initial margin methodology, re-affirming its commitment to improve margin efficiencies for its membership and reduce costs. A monthater it launched Settlement Monitor, a tool to perform analysis of settlement fails and to improve settlement performance.
In addition, CDSClear registered a record 鈧�3.36 trillion in index, single names and options notional cleared, up 47 per cent from 2021.
Daniel Maguire, group head of post trade at LSEG and CEO of LCH Group, says: 鈥淟CH has continued to deliver resilient multi-asset post-trade services to its customers and members during a year when markets have seen significant volatility.
鈥淭he record volumes achieved across our services are testament to our customer centric approach and partnership with the market to ensure they are supported through the benefits of clearing.鈥�
LCH, part of London Stock Exchange Group (LSEG), reported that the service registered a record 8.2 million trades in 2022, up 20 per cent from 2021.
The results come ahead of the USD LIBOR conversion to SOFR in Q2 2023 鈥� with more than 80 per cent of all new USD swap risk cleared by SwapClear now SOFR-based.
Total notional cleared at the service increased 18 per cent year-on-year, with clearing of inflation swaps reaching a record notional high of US$9.3 trillion in 2022.
As testament to the progress made in the transition to risk-free rates (RFRs), LCH says cleared swap liquidity grew considerably over the year 鈥� with more than 80 per cent of all new USD swap risk cleared at SwapClear now SOFR-based. This was versus less than 10 per cent in Q2 2021.
SwapClear also supported the move to RFRs in the Nordics by extending clearing eligibility to Swedish krona short-term rate (SWESTR) overnight index swaps (OIS) and is the first to launch the clearing of Denmark short-term rate (DESTR) OIS.
Over the year, SwapClear continued to grow across Asia, registering a nearly 30 per cent year-on-year increase in notional cleared in APAC currencies, and welcomed DBS Bank as its first direct member in Singapore.
SwapAgent saw a 130 per cent year-on-year increase with over US$3.9 trillion of notional registered. Further supporting the industry鈥檚 transition to risk-free rates, SwapAgent registered its first CIBOR/SOFR cross-currency basis swap between two Nordic banks: Nordea and Danske.
Membership at SwapAgent also saw growth in 2022, increasing to 23 dealer groups and 37 entities, up from 19 groups and 33 entities at the start of the year.
Across LCH and SA, RepoClear processed 鈧�288.4 trillion of nominal across 12.1 million trade sides cleared.
LCH SA鈥檚 RepoClear also expanded its settlement connections to investor CSDs, meaning members are now able to settle Dutch Government bonds at Euroclear Netherlands and Austrian and Spanish Government bonds at Clearstream Banking Frankfurt.
In June 2022, RepoClear SA introduced a value-at-risk initial margin methodology, re-affirming its commitment to improve margin efficiencies for its membership and reduce costs. A monthater it launched Settlement Monitor, a tool to perform analysis of settlement fails and to improve settlement performance.
In addition, CDSClear registered a record 鈧�3.36 trillion in index, single names and options notional cleared, up 47 per cent from 2021.
Daniel Maguire, group head of post trade at LSEG and CEO of LCH Group, says: 鈥淟CH has continued to deliver resilient multi-asset post-trade services to its customers and members during a year when markets have seen significant volatility.
鈥淭he record volumes achieved across our services are testament to our customer centric approach and partnership with the market to ensure they are supported through the benefits of clearing.鈥�
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