LCH Spider is live: Portfolio margining for OTC and listed rates derivatives
LCH, the global clearing house, has launched LCH Spider, its portfolio margining tool for interest rate derivatives. The go-live follows receipt of all necessary regulatory approvals. Eligible members and clients using LCH’s SwapClear and Listed Rates services can now offset margin between OTC and listed interest rate derivatives.
LCH Spider is a fully automated service that analyses member and client portfolios and selects which eligible trades correlate and provide risk reduction. If a member has opted in, the listed rates are then transferred to their OTC portfolio for offsetting and delivering risk and collateral efficiences. Initially, portfolio margining will be available for Sterling and Euro-denominated short term interest rate futures (STIRs) with plans to add further eligible contracts, in line with customer demand and LCH’s risk management framework.
LCH Spider is available on an “open access” basis, to any trading venue, that is connected to LCH and which lists suitably correlated interest rate derivatives. LCH has worked with Nasdaq NLX to include its eligible futures contracts as part of LCH Spider’s go-live. LCH is also set to introduce CurveGlobal contracts following the platform’s planned launch in Q3 2016. The implementation of MiFID II will further drive the possibility of greater risk offsets. Members and clients looking to calculate the potential benefits of using LCH Spider on their portfolios can simulate this using SMART Spider, a new extension of LCH’s margin simulation tool.