LCH.Clearnet has enhanced the clearing functionality of its CDS offering in line with best market practice. 

These enhancements, which have been designed and tested in collaboration with its clearing members, include:

• Refinements to the risk management framework
• Integration of the DTCC’s new automated credit events procedures (implemented 4 October 2010) and
• Implementation of CLS system connection for product related cash flows settlement

Christophe Hémon, chief executive, LCH.Clearnet, says: “The collaboration and dedication of our clearing members is critical to the enhancement of our services. We seek to build clearing models which fit with current market practices and which answer our members’ needs, whilst, at the same time responding to the regulatory push to reduce systemic risk by bringing more OTC products into clearing. We welcome recent policy developments and are well placed to operate within the proposed European rules for CCPs.”

The CDS clearing service was launched on 31 March 2010. As at 24 September 2010 the notional value of 622 contracts cleared by the service amounted to EUR22bn and open interest of EUR1.6bn.