The London Stock Exchange (LSE) Group’s LCH clearing arm processed a record volume of derivatives over the course of 2017, ahead of an expansion further into servicing growing Asian markets.
The notional value of interest rate derivatives processed by LCH reached over $873 trillion during the course of 2017, according to data to be published today by the LSE.
The total represented a 31 per cent increase over the year in flows in interest rate derivatives, which firms use to protect against interest rate moves, the firm said.
The firm will also announce plans to offer non-deliverable interest rate swaps in Chinese yuan, Korean won, and Indian rupee, in a continued effort to boost its presence in fast-growing Asian markets. The move comes after a pre-Christmas agreement between China and the UK to accelerate preparations for a London-Shanghai stock connect programme.
LCH, which already boasts a share of over 90 per cent of cleared interest rate swaps globally, according to the Bank of England, will also reveal its foreign exchange arm, Forexclear, processed a notional value of $11 trillion in 2017, more than triple the $3.2 trillion in 2016.
Daniel Maguire, LCH chief executive, hailed a “strong year” for the firm with “significant growth in volumes”.
The figures will give the firm a welcome boost as it faces a crucial fight for its dominant position in Europe.
Over the course of the last two years the LCH has been drawn into one of the City’s most heated political battles, after some European politicians indicated they might seek to force the clearing of euro-denominated derivatives onto EU shores after Brexit.
The proposition has attracted criticism from Bank of England governor Mark Carney as well as from the head of the US Commodity Futures Trading Commission who both said any move to fragment clearing along territorial lines would reduce the benefits of the industry to firms.
Meanwhile, the hunt for a new boss of the overall LSE Group continues, after former chief executive Xavier Rolet was forced to resign following a messy battle with an activist shareholder. Rolet had been a strident defender of the City’s role in euro-cleared derivatives.