Bpifrance switches IRS book to Eurex Clearing 16 December 2020France Reporter: Natalie Turner
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The French public investment bank Bpifrance has transferred its entire portfolio of derivatives, composed mainly of interest rate swaps, from LCH to EU-based Eurex Clearing to avoid clearing complications arising from Brexit.
The end of the Brexit transition period on 31 December is expected to cause disruption to legal and regulatory frameworks underpinning the clearing of securities between UK and EU entities.
LCH was one of three UK central counterparties to receive approval from European regulators to continue activities in the bloc after the transition period ends but this licence is currently due to expire on 30 June 2022.
The derivatives portfolio transfer was made possible thanks to BNP Paribas which acted as counterparty and clearing broker for Bpifrance.
The portfolio was transferred smoothly and without any disruption or market impact, says Eurex.
Erik Müller, CEO at Eurex Clearing, says: “We are pleased that Bpifrance, a major European partially state-owned bank, chose to switch their swap book to Eurex Clearing.
“Our service provides clients with a liquid EU alternative to clear their interest rate swaps.
“The volume of long-dated interest rate swaps cleared at Eurex rose to a new record of €56.5 billion (average daily volume) in November, a roughly four-fold increase over the first half of 2020.”
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