LCH.Clearnet Launches Central Clearing Service for the Tri-Party Repo Market

Clearing house LCH.Clearnet, which is majority owned by the London Stock Exchange (LSE) Group, has launched €GCPlus, a central clearing service for the tri-party repo market, in collaboration with Euroclear and Banque de France.

The new service will enable fixed income trading desks, treasurers and other market participants to efficiently manage Eurosystem eligible collateral and to generate liquidity in a cleared environment, while benefitting from balance sheet netting and capital efficiencies.

Available via several leading e-platforms, the €GCPlus service enables fixed income market participants to re-use the eligible collateral received either with the Banque de France or with any of 230 collateral takers on Euroclear’s collateral management system, the global Collateral Highway.

“Our clearing members are increasingly looking for efficient solutions to manage cash and collateral,” said Christophe Hémon, chief executive officer (CEO), LCH.Clearnet.

“The €GCPlus service enables fixed income clearing members to address their funding needs, trade on multiple platforms, move collateral quickly and easily and maximise balance sheet netting and capital efficiencies – all while benefitting from a secure trading environment with robust risk management capabilities.”

Valerie Urbain, CEO of Euroclear Belgium, Euroclear France and Euroclear Nederland (ESES), said: “The Euroclear group’s design to help boost clients’ liquidity flows began with an initial collateral management offering with Banque de France. It evolved with our agreement with LCH.Clearnet to create a general collateral trading pool and reached its most recent milestone in June 2013, with the launch of interoperability between the Euroclear Bank collateral management platform and Euroclear France.

“€GCPlus is the final step in an over-arching solution allowing market participants to anonymously obtain liquidity irrespective of whether they are clients of Euroclear Bank or an ESES CSD. We are delighted to work with Banque de France and LCH.Clearnet to deliver solutions that help to increase the efficiencies of the capital markets.”

The Banque de France said it welcomed implementation of the final component of the tripartite solution initiated by French market participants in 2011

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