LCH.Clearnet
Ltd (LCH.Clearnet) has launched clearing for Overnight Index Swaps
(OIS) contracts through its proven over-the-counter (OTC) interest rate
swap clearing service, SwapClear.
An OIS is a fixed/floating interest rate swap with the floating leg tied to a published index of a daily overnight rate reference such as the Sterling Overnight Interbank Average (SONIA) or the Euro Overnight Interbank Average (EONIA). Providing clearing to the OIS market, which is a major benchmark for short-term interest rate swaps, will increase interbank liquidity by mitigating counterparty risk, increasing trading capacity and reducing settlement costs.
Four currencies; USD, GBP, EUR and CHF, will initially be cleared, though this may be extended. The contracts are for tenors of up to two years and trades are accepted through MarkitWire, the electronic trade confirmation network for the OTC derivatives markets.
Joe Reilly, director of SwapClear, LCH.Clearnet said: "Managing counterparty risk has ... more »
