UK-based clearing company LCH has announced the launch of deliverable FX options clearing which is being rapidly picked up by the financial services industry, with early adopters including Barclays, Citi and J.P. Morgan. Further banks are expected to shortly start clearing the product.
Paddy Boyle, Global Head of ForexClear at LCH, said: “Clearing FX Options is an exciting milestone for LCH and the FX market. The launch of this service extends the benefits of clearing to more products and participants in the FX market, enabling them to benefit from the risk management, margin, capital and operational efficiencies of clearing. We’re delighted to partner with CLS to deliver this innovative new service.”
Alan Marquard, Chief Strategy and Development Officer of CLS, said: “This initiative marks a significant step forward for the global FX community. By working with LCH, we will reduce settlement and counterparty risk while improving efficiencies for those operating in the OTC cleared FX market.”
Robin Wemyss, Global Head of FX Options Trading at J.P. Morgan, concluded: “Clearing deliverable FX Options and their hedges is a significant step for the market. We look forward to seeing the number of counterparts and the associated liquidity grow in the coming months.
ForexClear plans to add further FX products to its service in line with demand, but it is currently clearing FX Options on eight currency pairs: AUDUSD, EURUSD, GBPUSD, USDJPY, USDCHF, EURJPY, EURCHF, EURGBP with physical delivery, as well as spot and forward hedges.