LCH SA is bringing the benefits of clearing to this growing asset class.

LCH SA has revealed that it will be providing clearing services for Bitcoin index futures and options contracts traded on GFO-X, a UK digital asset derivatives trading venue.

LCH SA is leading multi-asset clearing house that provides proven risk management capabilities across a range of asset classes; it is majority owned by London Stock Exchange Group PLC. GFO-X is the UK’s first regulated and centrally cleared trading venue dedicated to digital asset derivatives. It is authorized and regulated by the UK FCA (Financial Conduct Authority) to operate an MTF (Multilateral Trading Facility).

This move will allow market participants to access clearing of crypto derivatives within a regulated environment, demonstrating LCH SA’s commitment to providing the benefits of clearing to this growing asset class. The clearing service will be offered through a new segregated clearing service called LCH DigitalAssetClear, which is expected to go live in Q4 2023.

By using LCH DigitalAssetClear, members and clients will benefit from LCH SA’s innovative approach to enabling clearing of this new asset class, as well as its leading risk mitigation, settlement, netting, and margin efficiencies, all within a regulated environment.

The new Bitcoin index futures and options contracts will be cash-settled through LCH DigitalAssetClear and will be based on the GFO-X/Coin Metrics Bitcoin Reference Rate (GCBRR), a BMR-compliant reference rate of the US dollar price of Bitcoin.

LCH DigitalAssetClear will operate a fully segregated clearing service for market participants clearing these instruments, including a segregated default fund.

Frank Soussan, Head of LCH DigitalAssetClear, believes that this move is an important development for the market and is a powerful combination of GFO-X’s high-performance technology and optimized contract specifications with LCH’s proven risk management capabilities.

The joint vision of LCH SA and GFO-X is to ensure digital asset derivatives’ trading and clearing requirements and growing demand can be met within a secure, highly regulated environment.

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