The long-awaited merger of London Clearing House (LCH) and Euronext-owned Clearnet under a new independent, for-profit UK holding company, LCH Clearnet Group, will lead to a switch of clearing for exchange-traded derivatives to the Clearing 21 system, the group announced last week.
Described by LCH, and now LCH Clearnet chief executive, David Hardy, as "the deal the market has been demanding", the merger will take three to four years to complete and values the new entity at E1.2 billion, with LCH and Clearnet each valued at E600m.
Integration will come in three stages and will ultimately result in a 'virtual single clearing house' with Clearnet and LCH each providing full service clearing for the entire LCH Clearnet product range. This means members...