LCH Ltd has expanded the range of firms that can become sponsored members of Repoclear, its cash bond and repo trade clearing facility, to include regulated investment funds.
Insight Investment has become the first investment manager to transact cleared repo on behalf of a UK defined benefit pension scheme following changes to the clearing house’s repo clearing model.
This will make sponsored clearing services available to a wider set of buy-side firms including authorised designated investment companies, unit trusts and common contractual funds (CCFs).
Sponsored members access LCH’s clearing services via a clearing agent which holds full clearing membership, managing margin calls and providing default fund contributions for each sponsored transaction.
LCH’s global head of securities and collateral says: “This expansion of RepoClear’s Sponsored Clearing model is a significant benefit for the UK fixed income market, extending the benefits of clearing to a greater portion of the buy-side. This enables market participants to access repo capacity, maximise pricing and balance sheet efficiencies and ultimately optimise their risk management.”
Jos Vermeulen, Insight Investment’s head of solution design, says: “Our team has been working closely with LCH to expand this access. We are pleased that investors in our QIAIF range can now take advantage of the same broad market access and liquidity via RepoClear.”
