A new derivatives clearing house that’s
compliant with the European Market Infrastructure Regulation
(Emir) is set to become operational for the London Metal
Exchange (LME) next week.
Under Europe’s new clearing requirements, all
eligible derivatives must be cleared on a central clearinghouse
(also known as a central counterparty or CCP).
LME trades over 80% of the world's non-ferrous metal futures
and options. Today, these contracts are cleared through
LCH.Clearnet, which will be replaced by
LME Clear when it launches on September 22.
"All existing clearing houses have to adapt their systems in
order to comply with the new requirements," said Michael
Thomas, a London-based partner in Hogan
Lovells’ financial institutions group. "But
LME Clear is the first new entrant that has designed a clearing
house as Emir-compliant from the outset."
The most important part...