LCH.Clearnet suffered a 91 million loss in 2009, down 310 million year-on-year, yet regulatory pressure on the OTC derivatives markets has helped ease the shortfall.
The main cause of the loss was an impairment charge of 393.4 million. According to LCH.Clearnets chief executive Roger Liddel: “In cash equities we have responded to an increase in competition by reducing our fees, most notably in LCH.Clearnet SA where the clearing fee for blue chip stocks is now 0.05. Due to the impact of these tariff reductions on future revenues, we have recognised an impairment charge of 393.4 million.”
The reduction in fees has arisen due to stiff competition from rival exchanges and multilateral trading facilities.
However pressure from regulators has helped the clearing house re-coup some of the costs. The drive for transparency in the derivatives market has led to an significant increase in the value of contracts cleared in LCH.Clearnet’s OTC interest rate swap and fixed income businesses, both of which were launched over 10 years ago. The notional value of trades in SwapClear rose 42% to $215.5 trillion and the value of term adjusted fixed income trades across the Group rose 12% to 479.8 billion.