| Originating department: | Customer Management |
| Company Circular No: | LCH.Clearnet Ltd Circular No 2136 |
| Service Circular No: | EquityClear® No 085 |
| Date: | 03 April 2007 |
| To: | All LCH.Clearnet Ltd EquityClear® members. |
Further fee reductions relating to London Stock Exchange & virt-x cleared business
Dear Member,
Further to the press release of 22nd February 2007, LCH.Clearnet would like to advise its clearing members that it is to reduce the cost of clearing relating to all London Stock Exchange and virt-x business.
LCH.Clearnet will from the 1st July 2007, introduce a revised and re-structured tariff, enabling members to chose a tariff that best suits their business needs. Members are requested to observe the tariff table below that shows the different banding structure in relation to members’ volume.
This innovative re-structuring allows LCH.Clearnet members to move away from a market wide volume based tariff to a member specific tariff.
There are two elements to the revised structure, the banding fee and the applicable per trade tariff. The banding fee is an annual fee (collected semi-annually) and will be debited prior to the live date. From 1st July only 50% of this fee will be debited and the annual fee will commence from 1st January 2008 allowing members to freely change their choice of bands. The band’s applicable per trade tariff will be applied and debited monthly in arrears as normal on the member’s London Stock Exchange and virt-x trade volume.
Please use the following Web-link to access the EquityClear tariffs page http://www.lchclearnet.com/tariffs/ltd/transactions/equityclear.asp to find a user friendly calculator that will assist members with any modelling. Upon entering a member’s volumes the calculator will highlight the most economic banding and associated tariff. It will also show the relative cost of choosing any other band and the associated member saving from our existing tariff.
To assist members further LCH.Clearnet will also be issuing, within the next few weeks, guidance notes that will highlight the guidelines, processes and timelines for implementation.
John Serocold, a director of LIBA, has commented that LCH.Clearnet is to be commended for bringing forward an innovative tariff proposal intended to address the needs of market users, and hopes that this approach can be extended to more products and more geographic markets.
Should you have any questions regarding this circular or require a meeting to discuss further please contact Ian Mackenzie, Customer Management, +44 (0) 20 7426 7265, ian.mackenzie@lchclearnet.com
Yours Sincerely
Peter Shepherd
Managing Director, Commercial Services
| Band | A | B | C | D | E | F | G |
| Annual Banding Fee | £0 | £25,000 | £75,000 | £150,000 | £250,000 | £400,000 | £600,000 |
| LSE & virt-x UK tariff (from LCH.C) (reduced 23%) | £0.105 | £0.095 | £0.085 | £0.075 | £0.065 | £0.055 | £0.045 |
| LSE & virt-x UK tariff incl. CCP services @ 5.5p* | £0.16 | £0.15 | £0.14 | £0.13 | £0.12 | £0.11 | £0.10 |
| Virt-x non-UK tariff (reduced 23%) | £0.155 | £0.145 | £0.135 | £0.125 | £0.115 | £0.105 | £0.095 |
| Approximate ADV** that band is economic | Up to 10k | 10k to 20k | 20k to 30k | 30k to 40k | 40k to 60k | 60k to 80k | 80k and above |
* CCP Services fee within this table has been estimated using current LSE volumes. This fee is charged by Crest and is subject to change.
**ADV refers to a Member’s Average Daily trade Volume.