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
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 will be able to
choose where they want to clear. Hardy said that, though the
parties had looked at merging the organisations completely,
establishing one corporate entity had proved "elusive" due to
regulatory and jurisdictional issues.
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