CITI AND LCH CLEARNET COLLABORATE AS CHI EAST’S POST TRADE PARTNERS
Amsterdam, London - October 25, 2010 – Citi’s Global Transaction Services has been selected by LCH.Clearnet Ltd (LCH.Clearnet) to perform settlement agent bank services for the first Pan Asian dark pool, Chi East.
Chi East, the joint venture between Chi X Global and Singapore Stock Exchange, will launch in Q4 2010 as the first Pan Asian dark pool of its kind. Chi East aims to bring the same post trade efficiencies and risk management gained in Europe via regional Central Counterparties. LCH.Clearnet has been appointed as its Pan Asian Central Counterparty, and they in turn have chosen a long time partner, Citi, to provide all the necessary downstream settlement services.
Citi and LCH.Clearnet have a long and established working relationship, providing clients and execution venues with pan European clearing and settlement services. Their collaboration for Chi East will further strengthen the partnership between Citi and LCH.Clearnet, while also extending the advantage of Citi’s vast Asian network to LCH.Clearnet clients.
"LCH.Clearnet has a tradition of delivering superior risk management and cost efficiencies across asset classes. We are very pleased to work with Chi East and Citi to continue this work while increasing the geographic span for our clients," said Alberto Pravettoni, Managing Director, Alberto Pravettoni, Managing Director, Group Corporate Strategy LCH.Clearnet. "Everyone can see Asia will be the world’s growth engine and it is fantastic to be an integral part of the evolution."
"We applaud Singapore Stock Exchange and Chi X Global on their efforts to bring a regional trading venue to Asia Pacific. This will truly change the landscape for the better, and we are proud to play our part in supporting LCH.Clearnet," comments Kevin Rideout, Global Head of Market Infrastructures, Citi’s Global Transaction Services. "This is a major step forward for the Asia Pacific investment and brokerage community
Global Transaction Services, a division of Citigroup’s Institutional Clients Group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world. With a network that spans more than 100 countries, Citigroup’s Global Transaction Services supports over 65,000 clients. As of the third quarter of 2010, it held on average $340 billion in liability balances and $12.4 trillion in assets under custody. For more information on Citi’s Global Transaction Services, visit www.transactionservices.citigroup.com/transactionservices/home/
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com.
LCH.Clearnet is the leading independent clearing house group, the world’s largest clearer of OTC derivatives and in addition serves major international exchanges and platforms. It clears a broad range of asset classes including: securities, exchange traded derivatives, commodities, energy, freight, interest rate swaps, credit default swaps and euro and sterling denominated bonds and repos; and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.
A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When the trade is registered with a clearing house, it becomes the legal counterparty to the trade, ensuring the financial performance; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within the market. Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfill their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, who assess a member’s positions and market risk on a daily basis. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times.
LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.