LSEG announced that 11 global banks have agreed to invest in its Post Trade Solutions business, taking a 20% stake and becoming shareholders for aggregate cash consideration of £170 million ($227.0 mn) valuing the whole of Post Trade Solutions at £850 million. LSEG will also acquire an increased proportion of the revenue surplus from SwapClear at 90% (previously 70%) from 2026 until 2045. The transaction is expected to close in 2025.
The investing banks — Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, Nomura, Societe Generale and UBS — are major customers of LSEG’s clearing services and Post Trade Solutions business. As a result, this initiative replicates the original LCH model. As shareholders in Post Trade Solutions, the banks will benefit from strategic input into Post Trade Solutions and its future growth. Three nominated directors will join the Board of Post Trade Solutions.
Daniel Maguire, head of Markets at LSEG and CEO of LCH Group, said in a statement: “We collectively see an opportunity to bring material efficiencies across capital, risk and operations to the bilateral OTC derivatives market.”
Jim DeMare, co-president of Bank of America, said in a statement: “Technology-led collaboration is a vital component of enabling growth and efficiency in our industry. Our investment reflects Bank of America’s commitment to driving innovation that enhances operational resilience and facilitates effective risk management.”
Stephen Dainton, president of Barclays Bank and head of Investment Bank Management, said in a statement: “We are keen to develop innovative solutions that drive material capital and operational efficiencies for the industry, and are confident this investment will help support that ambition.”
Olivier Osty, deputy chief operating officer of BNP Paribas and chief executive officer of Corporate & Institutional Banking (CIB), said in a statement: “Clearing and post-trade efficiency are structural enablers to robust financial markets. BNP Paribas is committed to invest in those areas, and this long-standing and successful partnership with LSEG is a perfect example of that.”
Andy Morton, head of Markets at Citi, said in a statement: “We support LSEG’s work to advance the post-trade landscape for bilateral OTC derivatives, having seen the efficiency benefits. Ongoing innovation is vital for improving risk management, and Post Trade Solutions, backed by banks, can transform the global market.”
Troy Rohrbaugh, co-CEO for the Commercial & Investment Bank division at J.P. Morgan, said in a statement: “Our partnership with SwapClear has been highly successful in growing and scaling the first interest rate swaps clearing service into an established and profitable business. We see great opportunity for the many benefits associated with clearing such as risk management, standardization and efficiencies, to be replicated by those trading uncleared derivatives.”
Nat Tyce, co-head of Global Rates & Head of EMEA Global Markets at Nomura, said in a statement: “This collaboration with LSEG builds on our established relationship as long-standing members of SwapClear, where we have worked together over more than 15 years to develop clearing infrastructure that reduces risk and improves efficiency for OTC market participants.”
Alexandre Fleury, co-head for Global Banking & Investor Solutions at Societe Generale, said in a statement: “This important step marks the evolution of a partnership with central parties like LSEG, alongside collaborating banks, to collectively drive operational excellence and efficiency across a critical component of our industry for the benefit of clients and the wider ecosystem.”