DBS Bank has joined LCH SwapClear as the clearing service’s first direct member in Singapore.
By taking direct clearing membership in SwapClear, this will enable DBS to post Singapore Government Bonds as collateral, according to a joint statement from the two parties. With this development, SwapClear will be the first global offshore clearing house to accept Singapore government debt as eligible collateral.
SwapClear indicates that banks continue to focus on central clearing in the Asia-Pacific (APAC) region to realise operational efficiencies and regulatory capital relief. This has translated into a 15 per cent YoY increase in volumes cleared through SwapClear from APAC-domiciled clients and APAC currencies.
Isabelle Girolami, CEO of LCH Ltd, says: “We are proud to welcome DBS as our first member in Singapore and look forward to helping them to achieve their optimisation goals as they continue their impressive growth.
“Singapore is a strategic focus for us as we look to expand our services throughout APAC. Through our continued investments in regional products, services and people we hope DBS and other APAC firms continue to derive incremental value.”
Andrew Ng, group head of Treasury and Markets at DBS Bank, adds: “[As] LCH SwapClear’s first direct member in Singapore, [we will unlock] even greater liquidity in the OTC interest rate swap and IRS markets for our global client base.
“This partnership will also provide us with the highest standard of risk mitigation and unparalleled capital and margin efficiencies to further fortify our treasury markets business amid an increasingly competitive landscape. In particular, LCH’s expansion of collateral services to include Singapore Government Bonds was a particularly important step to meet our local market needs.”
