LCH SA has received regulatory approval from the French national competent authorities and European supervisory authorities to clear cash-settled Bitcoin index futures and options contracts.
Clearing services will be provided through LCH SA’s new dedicated service, LCH DigitalAssetClear, for these contracts traded on the UK FCA regulated digital asset derivatives trading venue, GFO-X.
LCH SA stated that the offering has been developed with GFO-X in close consultation with market participants to ensure digital asset derivatives are traded and cleared through a service this is secure, highly regulated and focused on digital asset derivatives.
LCH DigitalAssetClear is underpinned by a segregated default fund, a unique risk management model and dedicated set of clearing rules.
LCH SA added that it is currently engaged with general clearing members, with plans to launch the clearing service later this year.
“We are pleased to have received regulatory approval to launch this innovative service which will enable institutional market participants to trade and clear cash-settled Bitcoin index futures and options within a regulated environment they are familiar with and which will allow them to benefit from LCH SA’s proven risk management capabilities,” said Corentine Poilvet-Clédière, chief executive at LCH SA.
“LCH SA is excited to be working with GFO-X, together with the industry, to provide a regulated marketplace for this asset class as we look to expand our services as a truly international clearing house.”
The new cash-settled Bitcoin index futures and options contracts will be cleared through LCH DigitalAssetClear and will be based on the GFO-X/Coin Metrics Single Asset Real-Time Bitcoin Index (GFOXBR).
The development will allow firms to trade futures and options on the Bitcoin reference index directly.
LCH DigitalAssetClear will operate a fully segregated clearing service, including a segregated default fund and a dedicated set of clearing rules, for market participants clearing these instruments.
Members and clients using LCH DigitalAssetClear will also be able to leverage LCH SA’s risk mitigation, settlement, netting and margin efficiencies with a regulated environment.
“LCH DigitalAssetClear’s regulatory approval is a significant step in delivering a dedicated trading and clearing services targeted towards institutional adoption of this growing asset class,” said Arnab Sen, chief executive at GFO-X.
“Banks and institutional have been clear as to their demands for accessing this market and our joint solution delivers on their requirements.”