London Clearing House (LCH) has become the first non-US clearer to win recognition from regulatory body the Commodity Futures Trading Commission (CFTC), paving the way for the delivery of remote clearing services for US derivatives traders.
LCH is the only non-US domiciled central counterparty (CCP) to have achieved such recognition under the Commodity Futures Modernisation Act 2000, legislation that brought the Commodity Exchange Act (CEA) up to date.
LCH can use its new status to provide CCP services for over-the-counter derivatives contracts undertaken on the InterContinental Exchange.
The ruling also dispenses with the existing exemptions granted to LCH SwapClear, which previously required seperate regulatory approval for the introduction of new products over the platform.
LCH says it may seek to develop the scope of the recognition to enable further remote clearing services to be developed.
David Hardy, chief executive, says: “This is an important milestone in the development of LCH’s activities...The ability to act as a remote clearer for US-domiciled business and to accelerate the time to market of our swaps business reinforces LCH’s position at the cutting edge of central counterparty development."