LCH ForexClear adds non-deliverable FX options clearing to its offering

Steffy Bogdanova
January 7, 2021 3:16 pm

The global clearing house LCH today announced that it has successfully launched non-deliverable FX options clearing across nine currency pairs. Deutsche Bank and JPMorgan are among the first participants to clear the product.

The launch of non-deliverable FX options clearing builds on LCH ForexClear’s existing offering, adding to the clearing of non-deliverable FX forwards, deliverable FX options and deliverable FX forwards. Clearing the new product creates more opportunities for clearing members and their clients to achieve operational and capital efficiences through portfolio netting with products already cleared at LCH ForexClear. Clearing of non-deliverable FX options also supports market participants who are required to post initial margin (IM) under the Uncleared Margin Rules (UMR), potentially reducing their costs.

Paddy Boyle, Head of ForexClear, LCH commented:

Paddy Boyle, ForexClear, LCH

Paddy Boyle
Source: LinkedIn

We are delighted to have launched non-deliverable FX options clearing at LCH, complementing our strong existing offering. By clearing this product, market participants can access significant operational and capital efficiencies as well as benefiting from the robust risk management associated with clearing.

partnership

Logan Campbell, Global Head, FX Derivatives, Deutsche Bank said:

Clearing non-deliverable FX options is a natural product extension to complement cleared non-deliverable forwards. This enables us to benefit from clearing a wider range of our non-deliverable FX products, reducing operational complexity and increasing capital efficiencies with the reduction of risk weighted assets possible through clearing.

Ankur Dhingra, Co-head of Global FX Options, JPMorgan added:

Ankur Dhingra, JP Morgan

Ankur Dhingra
Source: LinkedIn

The launch of non-deliverable FX options clearing enables the market to benefit from clearing a wider range of FX derivatives, reducing operational complexity and increasing capital efficiences. This is an important milestone in light of uncleared margin rules as portfolio margining will enable cleared FX portfolios to be substantially more efficient.

LCH is clearing non-deliverable FX options clearing across nine currency pairs: four emerging market (EM) currency pairs, BRL, KRW, INR, TWD and five G10 pairs, AUD, EUR, GBP, JPY, CHF in tenors up to two years.

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Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
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