LCH.Clearnet Group Ltd., owner of the world’s largest interest-rate swap clearinghouse, began a U.S.-based service, Bloomberg News reported yesterday. LCH.Clearnet is announcing the system nine months after the London-based exchange bought the International Derivatives Clearing Group LLC in New York from Nasdaq OMX Group Inc. and other investors. The U.S. service provides for segregation of client collateral that is put up to back trades at the clearinghouse, said Richard Prager, head of global trading at BlackRock Inc. Asset managers who traded swaps with Lehman Brothers Holdings Inc. are still fighting in court to retrieve collateral given to the dealer’s London office. Lehman, one of the largest swaps dealers at the time, filed for bankruptcy protection in September 2008 and didn’t separate swaps collateral from its own assets in the unregulated market, an industry practice at the time. The 2010 Dodd-Frank Act imposed regulations on the $633 trillion over-the-counter derivatives market, including the requirement that most swaps be processed by clearinghouses. LCH.Clearnet LLC’s member banks are Barclays Plc, BNP Paribas SA, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Nomura Holdings Inc. and UBS AG.
