Growth without compromise
May 2026
Michel Semaan, global head of RepoClear, LCH, discusses the firm’s UK and EU cash bond and repo trade clearing service, from breaking down barriers to reacting to client feedback
Image: LCH
You have described RepoClear as being at a strategic crossroad, with rising competition and increasing regulatory and resiliency demands. How are you prioritising investment between resilience/regulation on one side and growth/innovation on the other?
We do not view resilience and growth as competing priorities. In fact, resilience is what enables sustainable growth, especially in markets as systemic as repo. As our membership expands, products diversify and volumes grow, the robustness of the clearing framework becomes even more critical.
We embed regulatory compliance, operational resilience, and risk management into every growth initiative from day one, rather than treating them as separate workstreams. At the same time, we remain highly focused on innovation that delivers client value, whether that is balance sheet efficiency, better collateral usage, or improved access to liquidity.
I would like to focus on regulation as, in recent years, the industry has seen examples where ambitious announcements moved faster than regulatory reality. That creates uncertainty for clients and, ultimately, undermines confidence. At RepoClear, we take a different approach. We work closely with regulators early, we test ideas thoroughly, and we sequence delivery carefully. Growth that cannot be implemented or scaled in practice is not growth, it is risk.
In a more competitive environment, the central counterparties (CCPs) that succeed will be those that combine scale and innovation with consistently high standards of resilience and regulatory compliance. That balance is at the heart of how we prioritise investment at RepoClear.
Sponsored and Guaranteed Clearing have become key themes in your strategy. What specific problems do these models solve for dealers and buy side firms, and what does success look like for you over the next few years? We are seeing both rising sovereign issuance — for example linked to defence and energy — and a growing focus on green and sustainable finance. How do you see these trends influencing the repo market, and what role can a CCP like RepoClear play in supporting a more sustainable bond ecosystem?
Sponsored and Guaranteed Clearing respond to a structural shift that is already well underway in European repo markets.
From a dealer perspective, these models allow client activity to be intermediated in a more capital efficient and operationally scalable way, while benefiting from central clearing’s netting, transparency, and risk management. For buy side firms, they provide access to cleared liquidity — becoming a member of RepoClear will allow buy side firms to have access to circa €1.5 trillion of liquidity across sterling and euro — a broader counterparty set and more predictable and scalable funding.
What is driving this evolution is not theoretical. According to the European Central Bank (ECB) analysis, non-bank financial institutions now account for a meaningful share of activity in euro area government bond markets — approximately 56 per cent of electronic secondary market-trading volumes in euro area government bonds in 2023, up from approximately 26 per cent in 2018, and their role continues to grow. As the centre of gravity of the market shifts, the infrastructure supporting it must evolve as well. Clearing models that were historically designed around dealer-to-dealer activity need to adapt to reflect how liquidity is actually provided and consumed today.
Success for us, therefore, is not simply about volumes. It is about enabling a broader, more diverse clearing ecosystem that reflects this changing market structure — one where dealers, buy side firms, and official sector participants can interact efficiently and safely through a common risk framework.
At the same time, rising sovereign issuance, linked to defence spending, energy transition, and broader fiscal needs, will increase the importance of efficient collateral transformation. The growth of green and sustainable bonds further underscores the emphasis on transparency and robust risk management. RepoClear can support this evolution by providing risk-managed access to high quality collateral, facilitating liquidity across traditional and sustainable instruments, and helping ensure that the expansion of markets is matched by resilience and stability.
RepoClear has traditionally been dealer?centric, but we now see more buy side participation through sponsored models and special membership. What are the biggest barriers still preventing buy side firms from clearing more repo, and how do you plan to remove them?
The barriers are well understood, and in many cases they are more perceived than structural.
One frequently cited obstacle is connectivity and onboarding cost. It is true that accessing a CCP requires an upfront investment, but this is largely a one-off cost that fundamentally changes the economics of participation. Through RepoClear, buy side firms gain access to a single, centrally-cleared market with more than 100 active clearing members, rather than having to establish and maintain bilateral relationships one by one.
In a purely bilateral model, buy side firms must negotiate and maintain multiple Global Master Repurchase Agreements (GMRAs), manage counterparty exposure on an individual basis, and absorb ongoing legal, operational, and documentation costs as activity scales. Clearing replaces that with one legal framework, one risk methodology and one operational interface, which becomes increasingly valuable as volumes and counterparties grow.
Another common concern is the cost of clearing itself. When viewed narrowly, clearing fees can appear higher than bilateral trading. But when taking a holistic view, factoring in netting benefits, balance sheet efficiencies, reduced counterparty exposure, lower settlement volumes, and operational simplification then the economics are often fully comparable, and in many cases more attractive, than bilateral execution. Netting alone materially reduces settlement activity, which directly lowers settlement and operational costs.
Importantly, we are not advocating for mandatory clearing in repo markets. We believe that markets function best when participants retain choice. However, we do strongly support the wider voluntary use of clearing, because the benefits, in terms of resilience, transparency, scalability, and liquidity access, are well evidenced, particularly in periods of market stress.
A further barrier has been ensuring that clearing models work for both buy side firms and the dealers that sponsor or guarantee them. Here, we have taken a very deliberate approach, working closely with regulators to adapt sponsored and guaranteed models so that they are operationally workable, economically viable, and attractive for all parties involved.
As a result of these efforts, across product design, regulatory engagement, and client education, we are now in a strong position. We have started onboarding a significant number of sponsoring and guaranteeing agents, and we expect to see the first hedge fund trades in the coming months. That marks a clear transition from discussion to execution.
GCPlus has become an increasingly important part of the cleared euro repo landscape, with growing volumes and an expanding set of eligible collateral. How do you see GCPlus evolving over the coming years, and what role do you expect it to play in strengthening RepoClear’s value proposition for both dealers and the buy side?
GCPlus is very much a success story for us, and importantly, it is a client-driven success story. The product we see today is the result of a deliberate redesign following extensive feedback from our members. Clients told us they needed a more integrated general collateral (GC) solution — one that removed silos between cleared specials and GC, improved netting opportunities, and worked seamlessly with triparty infrastructure. We listened, and we rebuilt GCPlus accordingly.
A key part of that redesign was the expansion of the GC basket offering. We introduced additional baskets, including Green and Country specific baskets, to better reflect how members manage collateral and liquidity.
The results speak for themselves. GCPlus activity more than doubled from 2024 to 2025, with volumes up over 120 per cent year-on-year, and record levels reached in the second half of 2025. This growth reflects both broader adoption by new members and deeper usage by existing ones.
Looking ahead, we see GCPlus continuing to evolve as a core liquidity tool. For dealers, it enhances balance sheet efficiency and reduces settlement and operational costs. For buy side firms, it offers scalable access to cleared funding without complexity. More broadly, GCPlus reinforces RepoClear’s role as a central liquidity hub, supporting a more resilient and integrated euro repo market.
Many recent enhancements — from new collateral and issuer eligibility to hybrid membership models – have been described as ‘client?driven’. Can you give a concrete example where client feedback directly changed the design or timing of a RepoClear initiative?
A consistent theme across everything we have delivered in recent years is listening to clients and adapting accordingly, and that applies across products, access models, and risk frameworks.
GCPlus is a clear example. As I mentioned earlier, its growth is the result of a deliberate redesign based on member feedback. Clients wanted reduced costs, better netting between GC and specials, and baskets that reflected how they actually optimise collateral. The strong growth we have seen since then confirms that this approach resonated with the market.
The same client driven logic applies to our Sponsored and Guaranteed Clearing models. Buy side firms and sponsoring dealers were very clear about what would and would not work operationally and economically. We have therefore adjusted these models hand-in-hand with regulators to ensure they are attractive for both agents and the buy side firms they support.
Client feedback has also directly shaped our risk and margin framework, including the introduction of a new VaR model in 2022 and continuous enhancements to various margin components that were completed last year. Members asked for greater predictability, better forward visibility, and tools that allow them to understand what drives margin requirements.
All these examples illustrate our approach that is about adapting the clearing ecosystem to how the market is evolving, while maintaining robust risk management and regulatory alignment.
We do not view resilience and growth as competing priorities. In fact, resilience is what enables sustainable growth, especially in markets as systemic as repo. As our membership expands, products diversify and volumes grow, the robustness of the clearing framework becomes even more critical.
We embed regulatory compliance, operational resilience, and risk management into every growth initiative from day one, rather than treating them as separate workstreams. At the same time, we remain highly focused on innovation that delivers client value, whether that is balance sheet efficiency, better collateral usage, or improved access to liquidity.
I would like to focus on regulation as, in recent years, the industry has seen examples where ambitious announcements moved faster than regulatory reality. That creates uncertainty for clients and, ultimately, undermines confidence. At RepoClear, we take a different approach. We work closely with regulators early, we test ideas thoroughly, and we sequence delivery carefully. Growth that cannot be implemented or scaled in practice is not growth, it is risk.
In a more competitive environment, the central counterparties (CCPs) that succeed will be those that combine scale and innovation with consistently high standards of resilience and regulatory compliance. That balance is at the heart of how we prioritise investment at RepoClear.
Sponsored and Guaranteed Clearing have become key themes in your strategy. What specific problems do these models solve for dealers and buy side firms, and what does success look like for you over the next few years? We are seeing both rising sovereign issuance — for example linked to defence and energy — and a growing focus on green and sustainable finance. How do you see these trends influencing the repo market, and what role can a CCP like RepoClear play in supporting a more sustainable bond ecosystem?
Sponsored and Guaranteed Clearing respond to a structural shift that is already well underway in European repo markets.
From a dealer perspective, these models allow client activity to be intermediated in a more capital efficient and operationally scalable way, while benefiting from central clearing’s netting, transparency, and risk management. For buy side firms, they provide access to cleared liquidity — becoming a member of RepoClear will allow buy side firms to have access to circa €1.5 trillion of liquidity across sterling and euro — a broader counterparty set and more predictable and scalable funding.
What is driving this evolution is not theoretical. According to the European Central Bank (ECB) analysis, non-bank financial institutions now account for a meaningful share of activity in euro area government bond markets — approximately 56 per cent of electronic secondary market-trading volumes in euro area government bonds in 2023, up from approximately 26 per cent in 2018, and their role continues to grow. As the centre of gravity of the market shifts, the infrastructure supporting it must evolve as well. Clearing models that were historically designed around dealer-to-dealer activity need to adapt to reflect how liquidity is actually provided and consumed today.
Success for us, therefore, is not simply about volumes. It is about enabling a broader, more diverse clearing ecosystem that reflects this changing market structure — one where dealers, buy side firms, and official sector participants can interact efficiently and safely through a common risk framework.
At the same time, rising sovereign issuance, linked to defence spending, energy transition, and broader fiscal needs, will increase the importance of efficient collateral transformation. The growth of green and sustainable bonds further underscores the emphasis on transparency and robust risk management. RepoClear can support this evolution by providing risk-managed access to high quality collateral, facilitating liquidity across traditional and sustainable instruments, and helping ensure that the expansion of markets is matched by resilience and stability.
RepoClear has traditionally been dealer?centric, but we now see more buy side participation through sponsored models and special membership. What are the biggest barriers still preventing buy side firms from clearing more repo, and how do you plan to remove them?
The barriers are well understood, and in many cases they are more perceived than structural.
One frequently cited obstacle is connectivity and onboarding cost. It is true that accessing a CCP requires an upfront investment, but this is largely a one-off cost that fundamentally changes the economics of participation. Through RepoClear, buy side firms gain access to a single, centrally-cleared market with more than 100 active clearing members, rather than having to establish and maintain bilateral relationships one by one.
In a purely bilateral model, buy side firms must negotiate and maintain multiple Global Master Repurchase Agreements (GMRAs), manage counterparty exposure on an individual basis, and absorb ongoing legal, operational, and documentation costs as activity scales. Clearing replaces that with one legal framework, one risk methodology and one operational interface, which becomes increasingly valuable as volumes and counterparties grow.
Another common concern is the cost of clearing itself. When viewed narrowly, clearing fees can appear higher than bilateral trading. But when taking a holistic view, factoring in netting benefits, balance sheet efficiencies, reduced counterparty exposure, lower settlement volumes, and operational simplification then the economics are often fully comparable, and in many cases more attractive, than bilateral execution. Netting alone materially reduces settlement activity, which directly lowers settlement and operational costs.
Importantly, we are not advocating for mandatory clearing in repo markets. We believe that markets function best when participants retain choice. However, we do strongly support the wider voluntary use of clearing, because the benefits, in terms of resilience, transparency, scalability, and liquidity access, are well evidenced, particularly in periods of market stress.
A further barrier has been ensuring that clearing models work for both buy side firms and the dealers that sponsor or guarantee them. Here, we have taken a very deliberate approach, working closely with regulators to adapt sponsored and guaranteed models so that they are operationally workable, economically viable, and attractive for all parties involved.
As a result of these efforts, across product design, regulatory engagement, and client education, we are now in a strong position. We have started onboarding a significant number of sponsoring and guaranteeing agents, and we expect to see the first hedge fund trades in the coming months. That marks a clear transition from discussion to execution.
GCPlus has become an increasingly important part of the cleared euro repo landscape, with growing volumes and an expanding set of eligible collateral. How do you see GCPlus evolving over the coming years, and what role do you expect it to play in strengthening RepoClear’s value proposition for both dealers and the buy side?
GCPlus is very much a success story for us, and importantly, it is a client-driven success story. The product we see today is the result of a deliberate redesign following extensive feedback from our members. Clients told us they needed a more integrated general collateral (GC) solution — one that removed silos between cleared specials and GC, improved netting opportunities, and worked seamlessly with triparty infrastructure. We listened, and we rebuilt GCPlus accordingly.
A key part of that redesign was the expansion of the GC basket offering. We introduced additional baskets, including Green and Country specific baskets, to better reflect how members manage collateral and liquidity.
The results speak for themselves. GCPlus activity more than doubled from 2024 to 2025, with volumes up over 120 per cent year-on-year, and record levels reached in the second half of 2025. This growth reflects both broader adoption by new members and deeper usage by existing ones.
Looking ahead, we see GCPlus continuing to evolve as a core liquidity tool. For dealers, it enhances balance sheet efficiency and reduces settlement and operational costs. For buy side firms, it offers scalable access to cleared funding without complexity. More broadly, GCPlus reinforces RepoClear’s role as a central liquidity hub, supporting a more resilient and integrated euro repo market.
Many recent enhancements — from new collateral and issuer eligibility to hybrid membership models – have been described as ‘client?driven’. Can you give a concrete example where client feedback directly changed the design or timing of a RepoClear initiative?
A consistent theme across everything we have delivered in recent years is listening to clients and adapting accordingly, and that applies across products, access models, and risk frameworks.
GCPlus is a clear example. As I mentioned earlier, its growth is the result of a deliberate redesign based on member feedback. Clients wanted reduced costs, better netting between GC and specials, and baskets that reflected how they actually optimise collateral. The strong growth we have seen since then confirms that this approach resonated with the market.
The same client driven logic applies to our Sponsored and Guaranteed Clearing models. Buy side firms and sponsoring dealers were very clear about what would and would not work operationally and economically. We have therefore adjusted these models hand-in-hand with regulators to ensure they are attractive for both agents and the buy side firms they support.
Client feedback has also directly shaped our risk and margin framework, including the introduction of a new VaR model in 2022 and continuous enhancements to various margin components that were completed last year. Members asked for greater predictability, better forward visibility, and tools that allow them to understand what drives margin requirements.
All these examples illustrate our approach that is about adapting the clearing ecosystem to how the market is evolving, while maintaining robust risk management and regulatory alignment.
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