LCH, a leading global clearing house, has announced the expansion of its range of eligible securities to include Singapore Dollar denominated cash and securities (government bonds and treasury bills) as collateral. The inclusion will commence from 18th October 2021.
The acceptance of SGD collateral comes shortly after the announcement of the expansion of LCH SwapClear opening hours to 24 hours per day. Both announcements are important steps in making it easier for Asian clients to access and use the premier service at LCH.
Singapore Dollar now joins a select group of currencies accepted as cash margin at LCH*. It reflects the growing number and importance of Asian members and clients at LCH, particularly in Singapore.
LCH accepting SGD collateral will be an important tool in improving liquidity management and helping members and clients optimize their margin costs. LCH and the member community are looking forward to a broad market adoption.
David Martin, Managing Director – Asia Pacific Head of Global Clearing, JP Morgan said: “We welcome this expansion as it provides greater flexibility for our clients, particularly those with large SGD balances, to more effectively utilise their collateral and manage the cost of funding.”
LCH provides Clearing Members with state-of-the-art tools to maximise the efficiency of managing their collateral assets. It accepts a wide range of eligible collateral to make it simple for members and their clients to meet their margin requirements at the clearing house.
Isabelle Girolami, CEO, LCH, said: “LCH continues to expand our collateral services so that we can provide members with new opportunities to use a broad range of collateral in new settlement locations. This latest development is vital to meeting the needs of the local Singapore market and a strategic point of engagement with our Singapore clients. It also marks another move by LCH to become laser focused on the Asia Pacific region.”
Rohit Verma, Head of APAC, LCH, said: “The spike in volatility in 2020 March-April brought the spotlight back on Liquidity Risk. In the world of clearing and UMR, eligible collateral has become a binding constraint. We have our ears to the ground and to make it easier for our Asia domiciled client base, we are excited to offer one more eligible collateral type that will help our clients and members in managing their liquidity.”
Ends
*subject to LCH collateral and rulebook criteria.
About LCH
LCH is a group of leading multi-asset clearing houses that provides proven risk management capabilities across a range of asset classes. As demand for robust clearing services continues to grow, LCH is committed to maintaining the highest standards of risk management across all our services.
As the markets’ partner, LCH operates an open access model, offering a choice of execution venues, delivering unprecedented choice and efficiencies to the marketplace.
LCH operates clearing houses around the world, with clearing houses incorporated in the UK and France and with offices in the United States and the Asia Pacific region. It offers clearing services across asset classes including OTC and listed rates; CDS and FX; fixed income; commodities; cash equities and equity derivatives. LCH also serves the non-cleared derivatives market through LCH SwapAgent, a service which extends the efficiencies and infrastructure of clearing to the market, without acting as a central counterparty.
LCH is majority owned by London Stock Exchange Group (LSEG.L), an international markets infrastructure business that sits at the heart of the world's financial community.
