LME Clear Receives Settlement Finality Designation
The designation relates to LME Clear’s secure payment system, which covers payment activities regarding the collection, processing and return of cash and collateral between LME Clear Members and the clearing house. All transfers, subject to certain conditions, are deemed final and therefore irrevocable, protecting clearing Members, clients and LME Clear.
The designation order, which came into effect on 8 August 2014, reduces systemic risk for LME Clear Members, offering enhanced protection against the adverse operation of European insolvency laws in the event of a counterparty default. Under the Settlement Finality Directive, collateral and payment instructions are better protected from administrators or liquidators of insolvent firms.
“The Bank’s designation marks another major milestone for LME Clear in its preparation for launch on 22 September, and demonstrates our commitment to building an EMIR-compliant, robust and safe clearing house” said Trevor Spanner, CEO of LME Clear.
Designed and built in consultation with the LME’s members, LME Clear is scheduled for launch on 22 September. The clearing house will initially clear all trades on the LME and those matched on the OTC matching service.