LCH and LIFFE announce Development Of Joint Venture

The London Clearing House (LCH) and the London International Financial Futures and Options Exchange (LIFFE) announced plans to establish a joint venture to identify new services for customers in wholesale financial markets. The joint venture will research potential business opportunities that would not logically fall into the ambit of LCH or LIFFE alone and which would directly benefit wholesale market participants by drawing on the combined trade capture, central counterparty, risk management and technology skills of the two organisations. Each organisation already has new initiatives to deliver trading and clearing efficiencies to these markets this year. LCH will launch clearing services for the over-the-counter market (OTC) - SwapClear and RepoClear - and LIFFE will further develop its swap futures contract -the LIFFE Euribor Financed Bond future. The joint venture will be responsible to the boards of LIFFE and LCH with both organisations retaining their existing businesses and individual development plans separate from the new entity. Prior to its establishment, a development board will be constituted, comprising the chairmen and chief executives of LCH and LIFFE, together with Alastair Clark, Executive Director of the Bank of England, Pen Kent CBE, non executive Director of NatWest Group, Sir Brian Pitman, Chairman of Lloyds TSB Group Plc, Dr Richard Sandor - founder of interest rate financial futures and former Vice Chairman of the Chicago Board of Trade (CBOT) and Director of Chicago Mercantile Exchange (CME). LIFFE's Chairman, Brian Williamson, said: "Today's announcement builds on LIFFE's and LCH's long partnership in providing customers with cost-efficient trading, clearing and settlement. London has a great asset in the London Clearing House which has an important role to play in the City's future as well as LIFFE's. Both LIFFE and the London Clearing House seek to capture more international business. Therefore it makes great sense to pool our skills and identify undoubted opportunities". LCH's Chairman, Sir Michael Jenkins, said: "We look forward very much to working with the development board in identifying joint opportunities for the two organisations".