This will enable US members to clear CDS index trades using LCH.Clearnet’s Paris-based CCP, which offers various institution options to clear credit default swap indices, while delivering extra liquidity to the CDSClear service and the market.
The latest permission is the third OTC derivative asset class to LCH.Clearnet Group’s OTC derivative clearing service for US members, which comprises interest rate and foreign exchange derivatives.
The company said that it received permission despite its application pending with the US Commodity Futures Trading Commission for registration as a derivatives clearing organization (DCO).
Commenting on the development, LCH.Clearnet CDSClear business CEO Charlie Longden said, "We’ve built upon our extensive OTC expertise and adapted it to provide robust risk and default management for the credit markets."
Operating as a multi-asset class and multi-national clearing house and majority owned by London Stock Exchange Group, the LCH.Clearnet Group serves major exchanges and platforms as well as various OTC markets.
