1. Introduction of New Collateral Service

With effect from 6 August 2007, members will be able to lodge securities for collateral purposes through the Triparty Collateral Management Service at Euroclear. 

2. Benefits

As Triparty has a high overnight settlement success rate, LCH.Clearnet Ltd will now assume settlement overnight meaning that securities can now be delivered in the overnight process and used to cover margin liabilities for the same settlement date.  This will eliminate the need for members to provide collateral one day in advance of utilisation against their margin obligations.  This will therefore increase efficiency in the use of members' collateral, which will result in cost savings for the members.  In addition, members will now have the ability to substitute securities intra-day via Triparty’s Autoselect service, which will also increase operational efficiency.

3. Acceptable Securities

A list of acceptable securities for the Triparty service is available on our website www.lchclearnet.com under Risk Management, Collateral Management

4. Procedures

Procedures for the new service are also available on the LCH.Clearnet Ltd website under Rules and Regulations, Recent and Forthcoming Rulebook Changes, Procedures, Section 4

5. Fees

LCH.Clearnet Ltd collateral utilisation fee remains unchanged at 10bps. Members should direct enquiries regarding the Triparty tariff to their Relationship Manager at Euroclear.

6.   Next Steps

Members who wish to use this service should contact Jenny Cronin on 020 7426 7044, e-mail jenny.cronin@lchclearnet.com or Martin McCrystal on 020 7426 7237, e-mail martin.mccrystal@lchclearnet.com to discuss their implementation plan.

Siobhán White
Director, Treasury Operations