LCH.Clearnet has won approval from US futures regulators to clear exchange-traded futures and options contracts in the US, paving the way for a new era of global competition between clearing firms.
The CFTC approval of LCH.Clearnet's application comes three years after the Anglo-French venture was initially given permission to clear OTC transactions in the US derivatives markets. The European clearing house views expansion in the US as a platform for attracting fresh volume at a time when competition is cutting margins to the bone.
The CFTC decision also bodes well for US Clearing Corp, the clearing house behind Eurex US, which has an application pending to create a trans-Atlantic clearing link between Frankfurt and Chicago.
With European and Chicago exchanges increasingly crossing territorial boundaries and competing head on for liquidity and volume, it seems likely that the Chicago Mercantile Exchange will be forced to respond to the arrival of LCH.Clearnet with plans to enter the clearing business in Europe.