LSE not in the fray for LCH.Clearnet
30 May 2011
The largest clearinghouse for swaps globally is being eyed by the world's high-profile operators of equities exchanges, the London Stock Exchange.
LCH.Clearnet Group Ltd said today it has been approached about ''some form of possible business combination.''
According to Bloomberg which cited three unidentified people in know of the matter, the company has been in discussion with Nasdaq OMX Group Inc, NYSE Euronext and London Stock Exchange Group Plc as part of a strategic business review.
The people, who requested anonymity as the discussions are private said no decision had been taken on any potential sale.
Clearinghouses such as LCH.Clearnet and Eurex Clearing function as central counterparties for every buy and sell order executed by their members, who post collateral, reducing the risk of traders defaulting on a deal.
The business is gaining traction as greater regulation leads to stricter norms for derivatives trading and a merger wave sweeping exchanges with $20 billion of exchange takeovers announced over the last seven months.