LCH, a global clearing house, has cleared the first Israeli shekel-denominated interest rate swaps.
Bank Leumi and Citi were among the first parties to clear a derivatives trade denominated in Israeli shekel. Citi is the executor for the launch of shekel clearing at LCH.
J.P. Morgan, Goldman Sachs, Citi and HSBC are also signed up to act as clearing brokers to support Israeli shekel swaps.
The launch has taken place in response to customer demand.
“The clearing of derivatives denominated in Israeli shekel is an important development for the market, significantly increasing the opportunity to realise margin and capital efficiencies,” says Ronen Agassi, head of capital markets division at Bank Leumi.
The Israeli shekel is the latest currency to be cleared at SwapClear, the clearing service provides liquidity in the over-the-counter (OTC) interest rate swap market, which also offers clearing for interest rate derivatives in 27 currencies.
Susi de Verdelon, the global head of SwapClear, says: “We are delighted to bring clearing of Israeli shekel interest rate derivatives to market. This is a significant enhancement to our global clearing offering and we’ve seen strong demand for the product from our international members and their clients.
“Many firms are looking to optimise their portfolios as the uncleared margin rules continue to be phased in, and the introduction of this product will be an important tool for them to achieve greater efficiencies."
