LCH SwapClear Member Commercial Changes
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Circular No. |
LCH Circular No. 4274 |
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Date: |
09th September 2023 |
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To: |
All LCH Ltd SwapClear Clearing Members |
Dear SwapClear Clearing Member,
We would like to advise you of the forthcoming changes to the SwapClear fee schedules which will take effect from 1st January 2024, subject to regulatory approval. This follows a review of all Member Tariff components, enhancements made to the platform and service, volumes and market conditions with the overall rationale outlined below.
A summary table of the changes is included in Appendix A.
Information on Member Tariff and Cap Changes
LCH and its SwapClear service is dedicated to providing the global financial sector with a market leading clearing service. LCH has continually invested in its service and product offering including changes directed by member feedback and regulatory requirements.
Investments in service enhancements include delivery of extended opening hours, enhanced risk methodologies, extensions to eligible collateral, more self-help features (LCH Knowledge Centre), improved user experience, tripling the number of compression runs, increasing the number of compression providers and improved relationship management of our formal compression provider programme. There has been significant investment in core resilience including computation, capacity, cyber defences, open access and upcoming strategic investment to enable application upgrades and further infrastructure upgrades.
Investments in product enhancements have allowed LCH to deliver clearable tenor extensions, migration to Risk Free Rates (RFR) and OIS indices to support regional markets (recently SEK, DKK, MXN, HKD and ILS), and expansion of the inflation and non-deliverable swaps modules.
Additionally, the OTC markets have grown (click here for volume information) with existing tariffs and caps no longer in line with current and expected market volumes.
SwapClear will continue to conduct periodic reviews of member tariffs and caps with the option of adjusting these in line with usage, inflation, platform and/or product enhancements. This will allow us to continue to provide the level of service, product development and enhancements our members have come to expect.
If you have any comments or want to discuss any aspects of the changes in more detail please contact your LCH representative or get in touch via LCHSales@lseg.com.
SwapClear is committed to supporting you as you review the changes. We thank you very much for your continued support and look forward to working with you in 2024 and beyond.
Kind regards,
LCH Relationship Management
Appendix A
Summary of Changes for Member Tariffs and Caps
Platinum Member Tariff
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Platinum Tariff | £2,900,000 | £3,250,000 |
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Expected minimum number of |
30,000 | 35,000 |
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Knock-in to Platinum tariff if Clear more than 35,000 trades per annum Clear substantial number of NDIRS and Inflation Swaps, reaching the cap on one or both products |
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Gold Member Tariff
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Gold Tariff | £2,250,000 | £2,400,000 |
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Expected minimum number of |
30,000 | 32,000 |
Silver Member Tariff
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Silver Tariff | £1,500,000 | £1,500,000 |
| Maximum number of contracts | 30,000 | 32,000 |
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Number of contracts that do not |
20,000 | 20,000 |
| Contract booking fee | £75 | £75 |
| Tariff fee cap | £2,250,000 | £2,400,000 |
Bronze Member Tariff
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Bronze Tariff | £500,000 | £500,000 |
| Contract booking fee | £75 | £75 |
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Contract maintenance fee per |
£6 | £6 |
| Bronze Tariff fee cap | £1,500,000 | £1,500,000 |
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Maximum number of contracts |
20,000 | 20,000 |
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Booking fee per contract if more |
£75 | £75 |
| Tariff fee cap | £2,250,000 | £2,400,000 |
Non-Deliverable Interest Rate Swaps (NDIRS)
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Plan A | £250,000 | £260,000 |
| Plan B | £75 registration fee £6 monthly maintenance fee per open trade |
No change |
Inflation Swap Cap
| Fee | 2023 Structure | Structure Effective 1st Jan 2024 |
|---|---|---|
| Inflation Swap Cap | £400,000 | £420,000 |
Member Compression
| Compression Fee Tariffs | 2023 Structure | Structure Effective 1st Jan 2024 | ||
|---|---|---|---|---|
| No. of Trades | Fee per Trade | No. of Trades | Fee per Trade | |
| LCH Compression | 0-35,000 | £14 | All | £10 |
| 35,001-70,000 | £10 | |||
| 70,000+ | £7 | |||
| ACSP Compression | 0-35,000 | £9 | All | £8 |
| 35,001-70,000 | £7.5 | |||
| 70,000+ | £6 | |||
| Member Compression Cap | £1,400,000 | £2,000,000 | ||