LCH RepoClear gains two new members 30 March 2020London Reporter: Maddie Saghir
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LCH has welcomed the Royal Bank of Canada (RBC) and its Channel Islands subsidiary to its RepoClear service.
RBC is the first Canadian bank to become a clearing member at LCH, while RBC (Channel Islands) is the member from the Channel Islands.
The new members say they were driven to join LCH in order to access enhanced financing liquidity for European clients and better manage counterparty risk.
LCH's service offers clearing for European and UK government bonds and repos across 14 markets.
It operates an open access model, connecting to multiple trading venues and central securities depositories to provide clearing members with a choice of where to execute and settle trades.
According to LCH, this allows members to benefit from the risk management efficiencies that come from clearing.
Commenting on the new members, Bruce Kellaway, global head of rates, securities and collateral at LCH, says that it represents “another significant milestone in RepoClear’s global growth, following a record year for the service in 2019”.
Earlier this month, LCH, which is a subsidiary of the London Stock Exchange, reported that RepoClear reached a record nominal value cleared of €106 trillion in comparison to 2018 which was recorded at €98.7 trillion.
The clearinghouse says the increase was predominantly a result of strong growth in the underlying repo market, particularly in Europe.
Ian Williams, head of European fixed income repo at RBC, adds: “This platform bolsters our connections to core market infrastructure, and offers RBC additional financing liquidity to support our European client activity."
Jeremy Fenn, director, central funding group at Royal Bank of Canada (Channel Islands), says: “Becoming a clearing member of LCH is a core part of our strategy to enhance our direct connections to key market infrastructure providers.
"Clearing allows us to effectively manage our counterparty risk as well as accessing a broad range of market participants and liquidity.”
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