LCH Clearnet (LCH-C) has admitted it faces stiff challenges
to its business despite its annual earnings revealing it saw
record volumes pass through it last year, which resulted in
record profits. This came in the same week that the
clearinghouse also slashed fees for in energy markets by
"There is no doubt that [LCH-C] faces a serious competitive
business challenge from a number of directions -
"clearing-driven" mergers, new entrants in our market space,
development of alternative trading platforms attracting
liquidity from customers served by us," said chief executive,
Roger Liddell, in a statement.
Over the past month LCH-C has seen Intercontinental-Exchange
(ICE) start to make its first signals that it could potentially
take its clearing through its own internal system (see FO Week
Vol 12 No 6) having acquired New York Board of Trade (Nybot)
last year (see FO Week Vol 11 No 50), which already
has such a platform in place. And this was further
strengthened, perhaps, by ICE's latest announcement that it
intends to merge with Chicago Board of Trade, a deal which
could further strengthen its reasons for using its own internal
clearing house given the increased number of contracts passing
through the exchange of the deal were to succeed.
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