June 17, 2021
FXall to connect to LCH for FX OTC trade clearing
Connectivity will enable FXall buy-side users to streamline and accelerate their access to clearing of FX OTC trades through LCH
NEW YORK / LONDON – Refinitiv FXall (FXall) is expanding FX traders’ access to cleared workflows for FX OTC trades by building connectivity to LCH. This new solution will provide FXall users a streamlined and quicker way of clearing NDF trades through LCH’s ForexClear service. The solution is expected to go live in Q4 2021 subject to regulatory approval.
With the implementation of Phase 5 of the Uncleared Margin Rules (UMR) in September 2021, buy-side institutions are assessing how they will be affected and weighing the benefits of FX clearing. Institutions are evaluating the costs and operational challenges associated with these new margin requirements for uncleared trades and may instead elect to clear portions of their FX flow.
Institutional traders on FXall will be able to determine which of their trades get cleared, for example based on the liquidity provider, currency pair, or account they are trading for. Trades will be routed to LCH via Settlement Center, FXall’s post-trade processing platform. In subsequent releases, FXall will support cleared workflows for additional instrument types and Refinitiv venues, as well as with additional clearing houses.
Jill Sigelbaum, Head of FXall, said: “Both FXall and LCH share a commitment to the principle of open access and giving market participants a range of options for clearing and trading. This initiative brings together the services of two well-established brands that deliver on that commitment, while empowering institutions minimize counterparty credit risk and achieve capital efficiency opportunities.”
James Pearson, Head of ForexClear, LCH, said: “We’re delighted to be working with FXall to connect with LCH. This initiative will expand the choice of trading venues available to buy-side firms that wish to access the risk management and efficiency benefits of clearing. The uncleared margin rules have sharpened the industry’s focus on initial margin and enhanced standards, and we look forward to working with FXall and the broader market to ensure widespread access to clearing.”
ForexClear delivers unmatched capital and operational efficiencies, including the flexibility and choice of both US and European clearing models. Developed in partnership with market participants, ForexClear empowers clients to more effectively meet daily clearing needs while at the same time benefiting from LCH’s proven risk and default management solutions.
As the leading multi-dealer FX trading platform, FXall offers clients access to deep liquidity with choice in execution, end-to-end workflow, and straight-through processing covering the entire trade lifecycle. FXall has a client base of over 2,300 clients and 230 bank and non-bank liquidity providers.
LSEG (London Stock Exchange Group) is more than a diversified global financial markets infrastructure and data business. We are dedicated, open-access partners with a commitment to excellence in delivering the services our customers expect from us. With extensive experience, deep knowledge and worldwide presence across financial markets, we enable businesses and economies around the world to fund innovation, manage risk and create jobs. It’s how we’ve contributed to supporting the financial stability and growth of communities and economies globally for more than 300 years.