LCH.Clearnet Limited (“LCH.C”) is a wholly owned subsidiary of LCH.Clearnet Group Limited. LCH.Clearnet Group Limited is owned primarily by its users. An ICSD and a number of exchanges also have stakes in the company. Both entities are UK companies and LCH.C is regulated by the Financial Services Authority (“FSA”) as a Recognised Clearing House (“RCH”) under the Financial Services and Markets Act 2000 (“FSMA”). LCH.C is also a Derivatives Clearing Organization in the USA and subject to Commodity Futures Trading Commission (“CFTC”) rules and the US Commodity Exchange Act.
2. Please list all relevant regulatory and supervisory authorities of the CCP.
3. Please detail any legal or regulatory segregation requirements applicable to customer IM held at the CCP.
Chapter 7 of the Client Assets (CASS) Sourcebook of the UK Financial Services Authority requires CMs to obtain confirmation from the CCP that client funds will not be set-off to satisfy house debts.
Structure of CMs
Please describe the legal structures applicable to the CMs
Does the CCP restrict either the (i) organizational type (e.g., banks, broker-dealers, futures commission merchants, unregulated entities, etc.) or (ii) jurisdictions of organization of CMs? (Note: This will be key, as much of the legal analysis will depend on the insolvency laws applicable to the CMs.)
LCH.C restricts membership as per the criteria stated in our rules and regulations; the CDS products are offered as part of the Liffe service, and so clearing members must meet the stated criteria for this service. These criteria are set out in the relevant section of the rules and regulations:
5. Please list all relevant regulatory and supervisory authorities applicable to the CMs.
This answer would most appropriately be provided by our clearing members.