LCH establishes clearing of credit index options
20 December 2017 London
Image: Shutterstock
LCH has introduced the clearing of credit index options to its CDSClear platform.
The central counterparty (CCP) is the first clearinghouse to design, develop and implement a risk framework specifically for the clearing of credit index options.
The index extends opportunities for clients by offsetting their European and US products through CDSClear.
This addition to LCH’s credit derivatives clearing service follows the launch of CDX high-yield clearing in July 2017.
According to LCH, the new risk framework will also supply clients with additional funding, capital and operational benefits.
The clearing of credit index options is available on the IHS Markit iTraxx Main 5Y and IHS Markit iTraxx Crossover 5Y indices.
Frank Soussan, global head of CDSClear for LCH, said: “CDSClear continues to go from strength to strength, with a significant increase in volumes over the last 12 months.”
“By extending CDSClear to the clearing of credit index options, members and clients can take advantage of significant funding, capital and operational benefits. This latest service is part of our continued expansion and innovation at CDSClear as more of the market moves toward clearing.”
Francois Popon, head of European CDS Trading at Societe Generale, commented: “Evolving regulations as well as the significant capital and operational benefits have acted as a driver for us to make more use of clearing service. We look forward to continuing to work with CDSClear to achieve enhanced risk management and improved efficiency across our credit business.”
The central counterparty (CCP) is the first clearinghouse to design, develop and implement a risk framework specifically for the clearing of credit index options.
The index extends opportunities for clients by offsetting their European and US products through CDSClear.
This addition to LCH’s credit derivatives clearing service follows the launch of CDX high-yield clearing in July 2017.
According to LCH, the new risk framework will also supply clients with additional funding, capital and operational benefits.
The clearing of credit index options is available on the IHS Markit iTraxx Main 5Y and IHS Markit iTraxx Crossover 5Y indices.
Frank Soussan, global head of CDSClear for LCH, said: “CDSClear continues to go from strength to strength, with a significant increase in volumes over the last 12 months.”
“By extending CDSClear to the clearing of credit index options, members and clients can take advantage of significant funding, capital and operational benefits. This latest service is part of our continued expansion and innovation at CDSClear as more of the market moves toward clearing.”
Francois Popon, head of European CDS Trading at Societe Generale, commented: “Evolving regulations as well as the significant capital and operational benefits have acted as a driver for us to make more use of clearing service. We look forward to continuing to work with CDSClear to achieve enhanced risk management and improved efficiency across our credit business.”
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