LSE.L Regulatory News (LSE)

FOR IMMEDIATE RELEASE

3 April 2017

LSEG plc statement on LCH SA

London Stock Exchange Group Plc (LSEG) notes the announcement by Euronext regarding its agreement with ICE Clear Netherlands for the provision of clearing services for its financial derivatives and commodities markets.

LSEG notes that in 2016, Euronext's contribution from derivatives clearing was immaterial to LCH SA, at less than 8% of LCH SA's Adjusted Operating Profit, taking into account the retrocession payments due to Euronext under the terms of the agreement, and less than 1% of LSEG's Adjusted Operating Profit.

LCH SA is a strong business accounting for a significant proportion of all European repo clearing and European cash bond clearing. It has seen significant growth prospects in fixed income and in CDS clearing, which has over 30% market share. CDSClear announced its first buy-side client last month and has the broadest CDS Coverage of any CCP Group, clearing 480+ single name CDS and 124 index series. LCH SA also announced last month that it extended its RepoClear service to offer clearing for cash and repo trades of German government securities, which complements the existing service clearing Italian, French and Spanish government securities.

LSEG is a strong proponent of the open access model and the provision of both choice and best in class service for its clients. In that context, LCH SA is in discussions to establish a connection to Turquoise, the pan-European MTF venue with more than 10% market share, to enable the clearing of European equities traded on Turquoise and the potential to pass on significant cost savings and efficiencies to investors in French, Dutch, Belgian, Portuguese and a range of other European securities. LCH already serves Turquoise with clearing services via its UK-based CCP, LCH Ltd. Turquoise is open to add LCH SA as an additional choice CCP for members consistent with Turquoise and LSEG's Open Access philosophy. Given its block trading innovation, Turquoise Plato™, designed in partnership with customers, Turquoise Plato is uniquely positioned to provide clients with the ability to trade significantly larger trade sizes versus industry dark pool averages in anticipation of MiFID II. This connection will provide additional choice to our customers and further price efficiencies.

The sale of LCH SA to Euronext was specifically contingent upon the merger between LSEG and Deutsche Börse AG (the "Merger") completing, and under the terms of the sale it is terminated upon prohibition of the Merger by the European Commission. 

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For further information visit: www.lseg.com