LCH.Clearnet plans US expansion with IDCG buy
Group has completed the purchase of Nasdaq OMX’s International Derivatives
Clearing Group (IDCG), giving the Anglo-French clearer the opportunity to grow
the products and services it offers in the US.
the acquisition, LCH.Clearnet will establish a US-domiciled central counterparty
and develop cross-margining initiatives with New York Portfolio Clearing
(NYPC), Depository Trust and Clearing Corporation and NYSE Euronext.
the Dodd-Frank Act, a large portion of the OTC derivatives market will be
brought on exchange-like platforms and subject to central clearing. As a
result, market participants will have to post greater margin against their
swaps exposures, which has led clearers to look for correlations between listed
and OTC instruments in an effort to reduce the collateral burden. NYPC, for example, enables the cross-margining
of interest futures positions with fixed income cash positions.
extended its SwapClear interest rate swap clearing service to US futures
commission merchants in March 2011.
transaction is a strategic move to expand our US footprint and provide clients
with additional flexibility and choice. It underscores our continued
commitment to a horizontal clearing model for a global marketplace,” said Ian Axe, CEO, LCH.Clearnet.
the terms of the acquisition, Nasdaq OMX will obtain a 3.7% stake in
LCH.Clearnet Group and IDCG will be renamed LCH.Clearnet LLC and re-launched in
Q4, subject to regulatory approval. At the start of this year, the London Stock
Exchange Group finalised the purchase of a 60% stake in LCH.Clearnet Group. The
acquisition is also scheduled for completion in Q4.