The following Client Clearing Fee Notes provide clarification of the application of the fees listed in the Client Clearing Fees section.
Notes on Client Clearing Fees
SwapClear charges all fees to clearing members; members individually make pricing arrangements with clients and confidentially notify SwapClear of the pricing plan for each client.
Clients can switch pricing plans quarterly, and must give SwapClear reasonable advance notice to make the operational changes necessary to effectuate such a change, i.e. no fewer than fifteen (15) days prior to a calendar quarter.
High Turnover Plan
Maintenance Fee
Only new trade clearing activity will be taken into consideration for calculations (i.e. post clearing events will not be included).
Calculation of activity will be counted at the client group level and applied to all sub-accounts in the relevant client group which are subscribed to the HTO plan.
New clients on the HTO plan will be subject to a 10bps maintenance charge until they have completed a full calendar quarter of clearing activity; subsequent quarters will be based on actual activity from the previous quarter.
Maximum Fund Threshold
The fee for funds in the same client group in excess of 75 will be charged semi-annually.
Funds subscribed to the HTO plan and with one or more cleared contracts contribute to the calculation of the maximum fund threshold.
The charge will be applied equally to all funds subscribed to the HTO plan
Blended Rate and Multilateral Compression
a) Registration replacement fee is a charge for booking a notional offsetting position based on the client’s current fee plan at the point of compression (e.g. $27.50 for High Turnover plan and the published schedule for Standard Pricing Plan).
b) Processing Fee: the applicable band will be assessed on a quarterly basis based on the preceding quarter’s activity. Replacement swaps (i.e. those that are the result of the blending activity or multilateral compression activity) are not charged a blended rate or multilateral compression fee.
IBOR Fallback Fees
'IBOR' refers to the interest rate benchmarks being replaced by alternative risk-free rates.
FRAs will not be subject to Fallback Fees.
Any IBOR-IBOR basis swaps that may be voluntarily split into two interest rate swaps by LCH prior to a conversion cycle will not be charged twice.
'SwapClear Contract' includes an 'FCM SwapClear Contract'
IBOR Conversion Fees
'IBOR' refers to the interest rate benchmarks being replaced by alternative risk-free rates.
Any IBOR-IBOR basis swap contracts is split into two interest rate swap contracts by LCH prior to a conversion will be treated as two separate swaps contracts from the time of splitting. As such, any outstanding IBOR contracts that may have resulted from a basis swaps splitting event will be charged separately if included in a conversion cycle.
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