SA Acceptable Collateral

Cash and securities collateral eligible to be posted as margin at LCH SA.

Initial and Variation Margin

In order to guarantee the net positions of Clearing Members and to be able to manage the risk of a default, LCH SA requires its members the deposit of an initial margin. This margin is calculated on a daily basis for all new positions on all markets: EquityClear, RepoClear and CDSClear

Initial margin requirements at LCH SA can be covered by high-quality liquid assets (HQLA) including cash and certain securities.

Variation margin calls must always be met with cash, and in the currency of underlying exposure.

This margin is calculated on a daily basis for all new positions on all markets.

Centralisation of Collateral Management

Eligible Collateral Summary

LCH SA accepts deposits of cash and securities to cover margin requirements. Clearing Members can satisfy their margin requirements using the following possibilities:

 
  CDSClear EquityClear RepoClear
1. EURO cash Yes Yes Yes
2. USD or GBP cash[1] Yes Yes Yes
3. Securities Collateral[1] Yes Yes Yes
4. Central Bank Guarantee   Yes Yes
5. Pledge solution[1] Yes Yes Yes

[1] Not accepted to cover the Default fund contribution

Rules and Regulations

[2]Protection against third parties' claims:

Collateral transferred to LCH SA is subject to all applicable legal and regulatory provisions governing Collateral provided to a clearing house, including, without limitation, Article L. 440-7 and L. 440-8 of the French Monetary and Financial Code.

Contribution to Default Fund transferred to LCH SA is subject to all applicable legal and regulatory provisions governing securities settlement systems including, without limitation, Article L. 330-2 of the French Monetary and Financial Code.

In accordance with the provisions of Article L.440-7 and L. 330-2 of the French Monetary and Financial Code, collateral and contribution to Default Fund transferred to LCH SA are protected against third party claims. Actually, no creditor of either a Clearing Member or LCH SA, no representative of a Clearing Member and no insolvency official (mandataire judiciaire) appointed under French insolvency proceedings (under Book VI of the French Commercial Code) may claim any right, neither over the Collateral transferred for the purpose of meeting a Clearing Member's Margin Requirement, nor over any contribution to the Default Fund, even in the context of an LCH Insolvency Proceeding or insolvency proceedings opened outside of France which are equivalent or similar to those set out in Book VI of the French Commercial Code.