LCH.Clearnet, a leading global clearing house, has been granted clearing agency recognition by the Ontario Securities Commission (OSC), for interest rate swaps, bonds and repos, and other cleared contracts*, for Canadian market participants based in Ontario, where a large proportion of Canadian market activity occurs.
Five Canadian institutions currently clear as direct clearing members through LCH.Clearnet's market-leading interest rate swap clearing service, SwapClear, under interim exemption orders in Ontario. In addition, due to the central role of interest rate swaps in the Canadian financial system, and significant volumes of interest rate swaps cleared through SwapClear by Canadian institutions, the SwapClear service was designated as systemically important by the Bank of Canada with effect from 2 April 2013.
Michael Davie, CEO of SwapClear at LCH.Clearnet, said: "We are pleased to be able to provide comprehensive and systemic OTC clearing services to the Canadian market and have worked closely with regulators and market participants to satisfy their requirements. Given the sophistication and strength of its financial sector, the Canadian market is an important part of the OTC landscape and it's been a privilege for LCH.Clearnet to be at the heart of the adoption of OTC clearing right from the outset. This latest development underscores our commitment to the Canadian market, and to providing our existing SwapClear offering to buy- and sell-side Canadian institutions, and ensures market participants have access to unparalleled global liquidity supported by LCH.Clearnet's proven risk management capabilities. SwapClear's 'systemically important' designation recognises our central role in the reform of the Canadian OTC derivatives market and demonstrates the high standards of risk and operational management to which we adhere."
* Prior to clearing agency status being granted by the OSC , LCH.Clearnet was providing clearing services for Canadian clearing members based in Ontario on an interim exemption order for SwapClear Global, RepoClear, EnClear and Nodal services.