- LCH is the first CCP to introduce a clearing capability for Overnight Index Swaps (OIS) benchmarked to the South African Rand Overnight Index Average (ZARONIA).
- ABSA Bank, Investec Bank, Nedbank, The Standard Bank of South Africa and RMB, a division of FirstRand Bank were the first participants to clear ZARONIA swaps, with Deutsche Bank and J.P. Morgan acting as clearing brokers.
LCH SwapClear announced that it has cleared the first swaps referencing ZARONIA, the new risk-free rate for South African Rand-denominated swaps. This new clearing capability demonstrates LCH’s commitment to supporting benchmark transition and aligns with the objectives of the Market Practitioners Group (MPG), established by the South African Reserve Bank (SARB) in 2018, to direct orderly benchmark transition in ZAR Rates markets.
Susi de Verdelon, group head of SwapClear and Listed Rates at LCH Ltd, said in a statement: “LCH is committed to supporting the South African market in its transition to ZARONIA and to contribute to the industry-wide efforts to ensure adoption of new risk-free rates globally.”
Rashad Cassim, deputy governor of the South African Reserve Bank and chair of the MPG, said in a statement: “This is a significant development for the South African derivatives markets, as demonstrated by the number of firms participating in this milestone. The clearing solution will be a key component in building liquidity in this new product with domestic and international participants, paving the way for a smooth transition to ZARONIA in line with our timetable.”
The South African rand represented LCH SwapClear’s seventh largest currency in terms of registered notional in the past year, with ZAR 223 trillion registered in 2023.