| LCH circular number: | 4376 |
| Date: | 7 April 2026 |
| To: | All LCH Clearing Members |
Dear LCH Clearing Member,
Please note an upcoming change that will apply to both LCH Ltd and LCH SA Clearing Members.
LCH Ltd and LCH SA intend to implement a 25% minimum cash collateral requirement for House accounts across all clearing services. Concurrently, the existing LCH Ltd Service Level Cap Requirement (SLCR) will be removed and replaced by this simpler, more stable and predictable minimum cash collateral requirement.
Background
LCH Ltd and LCH SA (jointly “LCH”) have observed a material reduction in cash collateral as a proportion of total margin. LCH must maintain robust liquidity provisions under both business‑as‑usual and Cover‑2 default scenarios to meet regulatory and board standard liquidity requirements. Cash is an essential part of any liquidity framework, and this ratio ensures a minimum proportion of cash is maintained across the CCPs.
Minimum Cash Requirement Scope
A 25% minimum cash requirement will apply to all House (“H”) account margin mnemonics, across all clearing services, and will be calculated daily based on each margin mnemonic’s end‑of‑day exposure.
The 25% calibration threshold is expected to remain stable under current conditions. LCH may purposely adjust the percentage if liquidity conditions, posting behaviour, or regulatory requirements change. Any changes will be communicated with sufficient notice via circular.
Exclusions
LCH SA only: GBP cash collateral will be excluded from LCH SA’s minimum cash collateral calculation.
Default fund contributions will be excluded from the calculation.
Client accounts are excluded.
Excluded House member types: RepoClear Sponsored and Guaranteed Sponsored Members.
Target Go‑Live Dates*
LCH Ltd: July 2026
LCH SA: October 2026
Exact go‑live dates will be communicated in a follow‑up circular.
*Subject to regulatory approval.
Additional Information
Should you have any further questions, please contact your CSM representative or email contact-lch@lseg.com.