Clearstream and LCH EquityClear collaborate on new post-trade connection

  • LCH Ltd-cleared equities contracts to be eligible for settlement via Clearstream
  • Global depository receipts and exchange-traded products in scope

Clearstream Banking and LCH have agreed to make LCH-cleared equities contracts eligible for settlement within Clearstream Banking.

As part of the new connection, all global depository receipts listed on London Stock Exchange’s International Order Book (including Asia-Pacific global depository receipts) as well as the full suite of internationally settled exchange-traded products (ETPs), such as exchange-traded funds (ETFs), exchange-traded notes (ETNs) and exchange-traded commodities (ETCs) which are listed on the exchange’s ETP trading service, are expected to be available for settlement through Clearstream in the third quarter of 2020.

Global depository receipts have been increasingly popular, with an average daily trading turnover of $570 million on London Stock Exchange’s International Order Book during Q1 2020. ETPs have also been continuously in demand, as investors in these products benefit from high diversification and liquidity as well as low cost.

Arnaud Delestienne, head of Eurobonds at Clearstream, said in a statement: “This partnership demonstrates our continuous support for increased interoperability across the European post-trade landscape. Going forward, both LCH and Clearstream clients stand to benefit from operational risk reduction and increased market efficiency. This perfectly aligns with our services as issuer CSD, always offering best-in-class flexibility and investor reach.”

Thilo Derenbach, head of European Custody Product at Clearstream, said in a statement: “Connecting LCH to our custody offering for domestic markets is a milestone for us. This provides yet another building block for European investors in their efforts to consolidating their entire trade flows, CCP-cleared or not, within Clearstream. We look forward to onboarding further clearing houses to our network within the near future, helping market participants to benefit from efficiencies across European markets.”

Alex Krunic, head of Equities, LCH, said in a statement: “We are pleased to be working with Clearstream to offer a choice of settlement venues for EquityClear’s clearing members. Our open access philosophy and customer partnership approach enables us to work with a number of different trading platforms and settlement venues to help drive efficiencies for the market as a whole.”

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