LCH SA Approved to Clear Bitcoin Index Derivatives

LCH SA, a subsidiary of LCH Group and a prominent European CCP based in Paris, has been granted to clear cash-settled Bitcoin index futures and options contracts. With these required regulatory approvals from the French national competent authorities (ACPR, Banque de France and AMF) and European supervisory authorities (EMIR College, ESMA), LCH SA will provide clearing services through its new dedicated service, LCH DigitalAssetClear, for these contracts traded on the UK FCA regulated digital asset derivatives trading venue, GFO-X.

Developed by LCH SA and GFO-X in close consultation with market participants, LCH DigitalAssetClear is designed to facilitate the trading and clearing of digital asset derivatives in a secure and highly regulated manner. The platform is underpinned by a segregated default fund, tailored risk management model and dedicated set of clearing rules. LCH SA unveiled that it plans to launch the clearing service later in 2024.

According to the announcement, the new cash-settled Bitcoin index futures and options contracts will be cleared through LCH DigitalAssetClear and will be based on the GFO-X/Coin Metrics Single Asset Real-Time Bitcoin Index (GFOXBR), which is an EUBenchmark Regulation -compliant reference rate of the U.S. dollar price of Bitcoin. Firms will be able to trade futures and options on the Bitcoin reference index directly.

Corentine Poilvet-Clédière, CEO of LCH SA, commented: "We are pleased to have received regulatory approval to launch this innovative service which will enable institutional market participants to trade and clear cash-settled Bitcoin index futures and options within a regulated environment they are familiar with and which will allow them to benefit from LCH SA's proven risk management capabilities. LCH SA is excited to be working with GFO-X, together with the industry, to provide a regulated marketplace for this asset class as we look to expand our services as a truly international clearing house."

Last year, LCH SA merged​ its RepoClear Euro debt service with its €GCPlus service to enhance liquidity services and collateral management capabilities.