LCH Tweaks Fees on Trade Collateral Cash
Published Date: 3/27/2025
Notice
Summary
LCH SA is updating the fees it charges members who use cash and securities as collateral for clearing trades, including credit default swaps. These changes could affect how much members pay starting April 1, 2025, once all approvals are in place. If you’re a clearing member, get ready for new fee rules that might impact your costs and how you manage collateral.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 1 costs, 1 mixed.
CDSClear Collateral Fee Changes
LCH SA is changing the fees and spreads it charges clearing members for cash and securities collateral used with its CDSClear service. These fee changes take effect on April 1, 2025 if LCH SA receives necessary regulatory approvals, and may change how much clearing members pay and how they manage collateral.
EUR Cash Spread Cut 2 bps
LCH SA proposes to lower the EUR cash collateral spread for CDSClear house and client accounts from 19.5 basis points to 17.5 basis points (a 2 bps reduction). The change is expected to be effective April 1, 2025, subject to regulatory approvals.
USD Treasury Client Fee Cut 5 bps
LCH SA proposes to reduce the fee charged on USD Treasuries posted as initial margin for CDSClear clients from 10 basis points to 5 basis points. This client-only fee reduction is intended to support expansion of U.S. client clearing and would take effect April 1, 2025 if approvals are received.
Most Securities Fees Increase 2 bps
LCH SA proposes to increase by 2 basis points the fees charged on each securities collateral type posted as initial margin, with exclusions for Pledge, CBGs, and other CDSClear clients' spreads. The proposed 2 bps increases would apply to securities collateral types listed in the filing and would take effect April 1, 2025 if approved.
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