LCH clears over $1 trillion in inflation swaps notional

LCH ForexClear reduces notional outstanding by $4.5b through NDF clearing service

LCH, a global clearing house, has announced that its SwapClear service has cleared a total of $1 trillion in notional of inflation swaps since the service launched in April 2015. This achievement follows a significant increase in cleared activity on the buy and sell side following the implementation of non-cleared margin rules in September 2016.

  • 43 members, 47 clients and 12 clearing brokers live and clearing GBP, EUR and USD inflation swaps
  • Significant uptick since introduction of bilateral margin rules, in some jurisdictions, on 1 September 2016
  • Record months in September and October with $170 billion in inflation swaps cleared in each month; a 500% increase compared to preceding 12 month average

Inflation-linked swaps are typically used by asset managers and pension funds looking to hedge against rising inflation and interest rates. Members and their clients clearing inflation swaps at SwapClear benefit from offsetting margin requirements against structurally similar cleared products at LCH.

SwapClear has also extended its compression offering to provide Solo Compression for inflation swaps to enable members to achieve further portfolio efficiencies.

Daniel Maguire, LCH
Daniel Maguire, LCH

Daniel Maguire, Global Head of Rates & FX Derivatives, LCH, added:

This is another significant milestone for SwapClear, demonstrating the continued demand for inflation swap clearing on both the buy and sell side. The introduction of bilateral margin rules in September is driving volume growth across our rates and FX services and we’re pleased to be supporting our members and their clients in achieving improved risk management and capital efficiencies.

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LCH clears over $1 trillion in inflation swaps notional

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