Clearing house LCH says its ForexClear service has seen 10 entities turn to actively clearing FX non-deliverable forwards in the past six months and that it has experienced a “significant” rise in cleared notional and trade count in 2016, with over $220 billion in notional cleared to date in September 2016.
As of 23 September, the firm says over $1 trillion in notional has been cleared in 2016.
“The uncleared margin rules that are coming into force across the world have been a catalyst for driving eligible and appropriate derivatives trades towards central clearing,” says Daniel Maguire, LCH’s global head of rates and FX derivatives.
ForexClear, LCH Clearnet’s centrally cleared FX operation, reported record volumes in October, driven in large part by activity in Latin American currencies.
The CCP cleared $500 billion in notional in October, with over 20,000 trades cleared in just one week and almost 80,000 cleared during the entire month.
By contrast, in July less than 20,000 contracts with a notion value of less than $125 billion were cleared at the CCP.
ForexClear says that while an increase in Asia currency NDF volumes helped drive this growth, Latin American currencies saw and even greater increase in activity, with $64 billion of BRL fixing at the end of the month.