LCH.Clearnet SA launched clearing for Spanish government bonds and repos on Friday 17 December, due to considerable demand from the trading community. On its first day, the service cleared over €4 billion in notional volumes.
The new service is operated by LCH.Clearnet SA's bond and repo service with trades settling at Iberclear, the local CSD. Initially, trades will be accepted via ICAP, with other trading platforms to be connected early in 2011. With over 12 years experience clearing French and Italian debts, this is a natural extension to LCH.Clearnet SA's product scope.
The offering complements LCH.Clearnet Limited's RepoClear's Spanish debt service launched on 9 August, which allows trades to be settled at either Clearstream Banking Luxembourg or Euroclear bank, the international CSDs.
Spanish bonds are accepted by LCH.Clearnet SA as collateral to cover margins. A direct account with the Bank of Spain can also be used by Spanish clearing members to facilitate the payment of cash movements. Cross margining is applied between French, Italian and Spanish debts.
Christophe Hémon, Chief Executive Officer, LCH.Clearnet SA said: "There has been strong demand from the Spanish trading community for us to launch this service which allows settlement in Iberclear, the Spanish CSD. Clearing members using the service will benefit from reduced counterparty risk and trading anonymity amongst others benefits. Over 10 clearing members are already using the service and cleared over €4 billion in notional volumes on first day."