Schroders Joins ForexClear
Posted by Colin Lambert. Last updated: November 14, 2022
LCH ForexClear has announced that asset manager Schroders has become the first European asset manager to clear through its services.
Schroders cleared NDF trades across a range of Asian and Latam currency pairs, with ForexClear member Citi facilitating the trades as Schroders’ clearing broker.
ForexClear says it continues to see growth of its FX client clearing service as increasing numbers of buy-side firms recognise the importance of margin and operational efficiencies, and enhanced risk management available through FX clearing. A record $370 billion in non-deliverable FX client clearing volumes were registered in the first nine months of 2022, 110% higher than the same period of 2021.
“With Phase 6 of the Uncleared Margin Rules implemented from September 2022, ForexClear has seen a growing number of firms choose to clear their FX trades,” says James Pearson, head of ForexClear, LCH. “We warmly welcome Schroders as the first European asset manager as it looks to benefit from the margin, capital, operational and credit efficiencies available through FX clearing. We look forward to partnering with Schroders and others in expanding our product offering from NDFs to also include options, forwards and swaps.”
Stephanie Whitford, global head of derivatives services, Schroders, adds, “Implementing ForexClear is an important step in increasing our central clearing capabilities for our global clients. ForexClear offers increased transparency, reduces counterparty risk and strengthens liquidity in the FX market. Schroders will be looking to increase our client and clearing broker usage over the coming months.”
Finally, Thomas Treadwell, director, EMEA head of clearing and FXPB product platform at Citi, says, “We are supportive of the capital, risk management and operational efficiencies of NDF clearing. In addition to clearing FX via the FCM model, we have expanded our connectivity to our UK and EU legal entities on the international clearing model, providing clients with increased global access options.”