LCH announces Singapore Dollar (SGD) as collatoral option

Rick Steves

Accepting SGD collateral will be an important tool in improving liquidity management and helping members and clients optimize their margin costs.

LCH has expanded its range of eligible securities to include Singapore Dollar denominated cash and securities (government bonds and treasury bills) as collateral.

The inclusion will commence from 18th October 2021 and the acceptance of SGD collateral comes shortly after the announcement of the expansion of LCH SwapClear opening hours to 24 hours per day.

The leading global clearing house has stated both announcements are important steps in making it easier for Asian clients to access and use the premier service at LCH.

The addition of the Singapore Dollar to a select group of currencies accepted as cash margin at LCH reflects the growing number and importance of Asian members and clients at LCH, particularly in Singapore.

Accepting SGD collateral will be an important tool in improving liquidity management and helping members and clients optimize their margin costs.

David Martin, Managing Director – Asia Pacific Head of Global Clearing, JP Morgan said: “We welcome this expansion as it provides greater flexibility for our clients, particularly those with large SGD balances, to more effectively utilise their collateral and manage the cost of funding.”

Isabelle Girolami, Chief Executive Officer at LCH, said: “LCH continues to expand our collateral services so that we can provide members with new opportunities to use a broad range of collateral in new settlement locations. This latest development is vital to meeting the needs of the local Singapore market and a strategic point of engagement with our Singapore clients. It also marks another move by LCH to become laser focused on the Asia Pacific region.”

Rohit Verma, Head of APAC at LCH, commented: “The spike in volatility in 2020 March-April brought the spotlight back on Liquidity Risk. In the world of clearing and UMR, eligible collateral has become a binding constraint. We have our ears to the ground and to make it easier for our Asia domiciled client base, we are excited to offer one more eligible collateral type that will help our clients and members in managing their liquidity.”

LCH and the member community are looking forward to broad market adoption, the firm added, as the clearinghouse provides state-of-the-art tools to maximize the efficiency of managing their collateral assets.

The clearinghouse has reported several record volumes in September. The implementation of the latest phase of the uncleared margin rules in September served as a specific milestone for the derivatives market.

Attention is turning to the cessation of LIBOR at the end of the year and the firm remains committed to supporting the market in this reform and driving the migration to risk-free rates.

  • Read this next

    Fintech

    Volt secures EMI license, expands payment solutions in UK

    Volt has successfully obtained an Electronic Money Institution (EMI) license from the UK’s Financial Conduct Authority (FCA).

    Retail FX

    ASIC bankrupts finfluencer Tyson Scholz over stock tips

    The Australian Securities and Investments Commission (ASIC) has effectively bankrupted Tyson Robert Scholz, the figure behind “Black Wolf Pit.” The action marks a significant crackdown on so-called ‘finfluencers’ and individuals providing unlicensed financial services.

    Digital Assets

    Green Bitcoin Presale Raises $1M as Bitcoin Approaches its ATH

    The eco-friendly crypto project Green Bitcoin has seen its limited-time presale phase cross $1 million in funding. With an innovative gamified staking model and energy-efficient foundation, Green Bitcoin offers token holders a way to stake their tokens and generate yield.

    Web3

    Introducing QuickNode Streams: Elevating Blockchain Data Management

    Discover QuickNode’s Latest Innovation: Streamlining Blockchain Data Streaming for Enhanced Efficiency and Accessibility. Explore the Future of Blockchain Technology with Streams.

    Industry News

    John Oliver rips into MetaTrader over role in ‘Pig Butchering’ scams

    “If your friend told you to download an app, and you saw it in the app store with good reviews, you might assume everything on it was legitimate. In before, you saw MetaTrader’s logo which looks like three men in suits jerking each other off under a table – an appropriate metaphor for cryptocurrency if I have ever seen one,” Oliver quipped.

    Digital Assets

    Coinbase supports Nethermind and Erigon to ease Geth dependency

    Coinbase plans to support additional execution clients as America’s largest crypto platform aims to improve the Ethereum blockchain’s resilience and mitigate the risks associated with the network’s heavy reliance on a single client.

    Opinion

    How AI Transforms Trading: Current Trends and Perspectives

    In 2023, we observed a boom of news about Artificial Intelligence (AI) in every field, whether finance, tech or medicine. In 2024 and later, AI will take an even more significant place.

    Industry News, Uncategorized

    FCA wants to tackle lack of competition in wholesale data market

    “Complex licensing practices by MDVs and trade data providers who deliver their data through MDVs increase costs for data users. Many Market Data Vendor (MDV) users have to hold licences both from the data generator (such as a trading venue) and from the MDV through which they access data. We have seen an increasing proliferation of licences for similar data types and different use cases. Complexity also drives additional costs for data users, such as operating a compliance team.”

    Digital Assets

    SEC objects to Terraform’s $166 million legal retainer

    The U.S. Securities and Exchange Commission (SEC) has lodged objections against Terraform Labs for a $166 million retainer payment to its legal representatives ahead of its trial.

    <