Mitsubishi UFJ Securities International plc (MUSI) is now clearing its interest rate swap (IRS) business through LCH.Clearnet Limited’s (LCH.Clearnet) market leading interest rate swap clearing service, SwapClear, significantly reducing counterparty, credit and operational risk.
As the London-based securities and investment banking boutique of one of the world’s largest financial institutions, MUSI is committed to responding quickly to market and client demands. With a total value of $347 trillion, interest-rate swaps continued to be the largest part of the OTC derivatives market in the first half of 2010 (Bank for International Settlements, 2010).
Kirsty Brown, Head of Business Development and Strategy at MUSI, comments, “Increased regulation and scrutiny mean reducing risk in the fast-growing OTC market is a substantial challenge. LCH.Clearnet is the industry standard in clearing and counterparty services and our partnership confirms MUSI’s commitment to offering the best possible protection from risk.”
Michael Davie, CEO of SwapClear at LCH.Clearnet said: “The speed with which MUSI has introduced clearing for its IRS business attests to their commitment to manage risk. We look forward to providing them with the benefits of centralised clearing such as reduced counterparty risk, increased capital efficiencies and lower operational costs. This extension to SwapClear’s membership confirms the key position that our service has established within the OTC post-trade environment. ”
The only truly global clearing service for IRS, the SwapClear service clears over 40% of interest rate swaps globally. In December 2009, LCH.Clearnet was the first clearing house to launch interest rate swap clearing for buy-side clients through SwapClear, offering a unique level of security to clients in the case of a bank default through margin segregation and portability of contracts. The introduction of the FCM (Futures Commission Merchant) model for SwapClear early next year* will increase choice for US based customers, enabling them to clear with the world’s leading interest rate swap service within a familiar framework.