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LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Limited. Registered in England No. 25932 Registered Office: 10 Paternoster Square, London, EC4M 7LS

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VIA CFTC PORTAL 

October 24, 2023 

Mr. Christopher Kirkpatrick 

Commodity Futures Trading Commission 

1155 21st Street NW 

Three Lafayette Centre 

Washington, DC 20581 

LCH Limited Self-Certification: Extension of Open Access to Approved Compression Service 

Providers 

Dear Mr. Kirkpatrick, 

Pursuant to Commodity Futures Trading Commission (“CFTC”) Regulation §40.6(a), LCH Limited 

(“LCH”), a derivatives clearing organization registered with the CFTC, is submitting for selfcertification revisions to its Procedures and FCM Procedures (“LCH Rules”) related to codifying 

access to Approved Compression Service Providers, in addition to Approved Trade Source Systems 

and Trade Venues on an open and non-discriminatory basis (the “Proposed Rule Change”).1

Part I: Explanation and Analysis 

LCH provides open access to Approved Trade Source Systems and Trading Venues on an open and 

non-discriminatory basis. LCH has established an application process for approved trade source 

system status in accordance with the policies published on LCH’s website. An Approved Trade 

Source System may in providing transaction details to LCH rely upon similar details delivered to it by 

a Trading Venue (where such transaction is executed on such Trading Venue). Since LCH may rely 

on details relating to such transactions obtained from a Trading Venue for verification purposes or to 

generate reports or to exercise its rights or discretion under LCH Rules, LCH may direct the Trading 

Venues to use prescribed format messages or classifications. 

LCH also provides access to Approved Compression Service Providers on an open and nondiscriminatory basis. Approved Compression Services Providers are required to meet certain 

requirements of LCH, including the provision of relevant information, execution of documents, and 

proof of operational capabilities. Additional criteria for prospective compression providers are 

published on LCH’s website.2

LCH Rules currently state LCH provides access to Approved Trade Source Systems and Trading 

Venues on an open and non-discriminatory basis. The Proposed Rule Change will amend LCH Rules 

to codify that, in addition to Approved Trade Source Systems and Trading Venues, LCH also 

1 Capitalized terms not defined herein shall, unless otherwise indicated, have the meanings ascribed to such 

terms in LCH Rules. 

2 See Approved Compression Service Providers (ACSPs). 

https://www.lch.com/services/swapclear/essentials/approved-compression-service-providers-acsps. 
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provides access to Approved Compression Service Providers on an open and non-discriminatory 

basis. 

Part II: Description of the Rule Changes 

LCH will amend Section 2.1.3(d) of the FCM Procedures to add “FCM Approved Compression Service 

Providers”. LCH will also amend Section 1.3.5 of the LCH Limited Procedures Section 2C to add 

“Approved Compression Services Providers”. 

The changes to the LCH Rules are included as Appendices I - II in black line form. The changes will 

be effective not earlier than November 7, 2023. 

Part III: Core Principle Compliance 

LCH has reviewed the Proposed Rule Change against the requirements of the Core Principles and 

finds it will continue to comply with all requirements and standards set forth therein. Specifically, this 

rule change has potential relevance to Core Principle C (Participant and Product Eligibility). 

LCH believes the Proposed Rule Change will not impact its ongoing compliance with the objectives 

of Core Principle C and CFTC Rule 39.12. Core Principle C requires, among other things, each 

derivatives clearing organization establish appropriate admission and continuing eligibility standards 

for members of, and participants in, the derivatives clearing organization. In addition, Core Principle 

C requires that participation and membership standards be objective, publicly disclosed and permit 

fair and open access. LCH is proposing to clarify in its rules that it provides access to Approved 

Compression Service Providers, in addition to Approved Trade Source Systems and Trade Venues, 

on an open and non-discriminatory basis. Approved Compression Services Providers are required to 

meet certain publicly-disclosed requirements of LCH, including the provision of relevant information, 

execution of documents, and proof of operational capabilities. LCH further provides additional access 

criteria on its public website. LCH therefore believes the Proposed Rule Change is consistent with 

Core Principle C and CFTC Rule 39.12. 

Part IV: Public Information 

LCH has posted a notice of pending certification with the CFTC and a copy of the submission on 

LCH’s website at: https://www.lch.com/resources/rulebooks/proposed-rule-changes. 

Part V: Opposing Views 

There were no opposing views expressed to LCH by governing board or committee members, 

members of LCH or market participants that were not incorporated into this proposal. 

Certification 

LCH hereby certifies to the CFTC, pursuant to the procedures set forth in CFTC Regulation §40.6, 

that the attached submission complies with the Commodity Exchange Act, as amended, and the 

regulations promulgated thereunder. 
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Should you have any questions, please contact me at ryan.hajen@lseg.com. 

Yours sincerely, 

Ryan Hajen 

Ryan Hajen 

Senior Compliance Manager 

LCH Limited 
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Appendix I 

FCM Procedures 

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FCM PROCEDURES OF THE CLEARING HOUSE

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FCM Procedures FCM SwapClear

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Standing Order Amount:

To facilitate the registration of SwapClear Transactions, an FCM

Clearing Member may elect to maintain a minimum level of Available

FCM Buffer with the Clearing House at the start of a Business Day

(such amount, the “Standing Order Amount”). The Clearing House

ay approve such election in its sole discretion. Upon the effectiveness 

of such election, if, at the end of a Business Day, the amount of a given 

FCM Clearing Member’s Available FCM Buffer is less than the 

Standing Order Amount, the Clearing House will call the FCM 

Clearing Member for an amount of cash Collateral equal to the

difference. Any amount so called and received by the Clearing House

pursuant to this section shall constitute FCM Buffer of the given FCM

Clearing Member.

The form and manner of an election by an FCM Clearing Member

pursuant to this section shall be determined by the Clearing House in

its sole discretion (a “Standing Order Request”). In the event an

FCM Clearing Member wishes to rescind or modify its Standing Order

Request, it must contact the Clearing House’s Client Services

Department (ratesclientservices@lch.com). The Clearing House may 

reduce the Standing Order Amount or terminate a Standing Order

Request in its sole discretion

Through submitting a Standing Order Request, an FCM Clearing

Member warrants that the individual making the request on behalf of

the FCM Clearing Member is appropriately authorized to do so.

(d) SwapClear FCM Approved Trade Source Systems and FCM 

Trading Venues

(i) FCM Approved Trade Source Systems

Application for FCM Approved Trade Source System status shall be 

made in accordance with the policies published from time to time on 

the Clearing House's website. A list of FCM Approved Trade Source 

Systems currently approved by the Clearing House is available on the 

Clearing House's website. Where the Clearing House approves 

additional FCM Approved Trade Source Systems, it will notify FCM 

Clearing Members via member circular.

FCM SwapClear Transactions presented through an FCM Approved 

Trade Source System must be in an acceptable message format, as 

prescribed by the Clearing House.

Notwithstanding the designation by the Clearing House of any system 

as an FCM Approved Trade Source System, the Clearing House makes 

no warranty (and will accept no liability) as to the effectiveness, 

efficiency, performance or any other aspect of the services provided by 

any FCM Approved Trade Source System or the timeliness or 

otherwise of the delivery of any FCM SwapClear Transaction details 
FCM Procedures FCM SwapClear

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by that FCM Approved Trade Source System to the Clearing House. 

Such matters form part of the relationship between the FCM Clearing 

Members and that FCM Approved Trade Source System.

The Clearing House will process any FCM SwapClear Transaction 

reported to it by an FCM Approved Trade Source System on an “as is” 

basis and, subject to the FCM Rulebook, will register any such FCM 

SwapClear Transaction on the basis of the data provided to it by the 

FCM Approved Trade Source System and approved by the relevant 

FCM Clearing Member. The Clearing House has no obligation to 

verify that the details received properly reflect the trade entered into by 

the relevant Executing Parties.

The Clearing House accepts no liability for any error within or 

corruption of any data sent by an FCM Approved Trade Source System 

to the Clearing House or to an FCM Clearing Member or any delay in 

or failure of the transmission of such data to the Clearing House. In 

the event that the Clearing House registers any FCM SwapClear 

Contract on the basis of incorrect or corrupted data sent to it by an 

FCM Approved Trade Source System and accepted by an FCM 

Clearing Member, the FCM Clearing Member concerned shall be 

bound by the terms of such FCM SwapClear Contract. The Clearing 

House shall use its reasonable efforts to assist the relevant FCM 

Clearing Members in re-registering the trade on the correct basis but 

the Clearing House shall not be liable to the FCM Clearing Member or 

anyone else with regard to the registration (or lack of registration or reregistration) of any such FCM SwapClear Contract.

FCM Clearing Members shall ensure that FCM Acceptances are 

provided by appropriately authorized personnel. Apart from the 

foregoing acceptance, the Clearing House is not able to, and will not, 

verify the authorization of the source of any details of any transaction 

reported to it for registration by any FCM Approved Trade Source 

System. The Clearing House shall have no liability in the event that 

any FCM Clearing Member suffers any loss through the unauthorized 

FCM Acceptance.

(ii) FCM Trading Venues

While the Clearing House receives details of an FCM SwapClear 

Transaction via an FCM Approved Trade Source System pursuant to 

Section 2.1.3(a) of these FCM Procedures, such FCM Approved Trade 

Source System may in providing such details to the Clearing House 

rely upon similar details delivered to it by an FCM Trading Venue 

(where such FCM SwapClear Transaction is executed on such FCM 

Trading Venue). Additionally, the Clearing House may rely on details 

relating to an FCM SwapClear Transaction obtained from an FCM 

Trading Venue for verification purposes or in order to generate reports 

or to exercise its rights or discretion under Regulation 45. In this 

regard, the Clearing House may direct the FCM Trading Venues to use 

prescribed format messages or classifications. 
FCM Procedures FCM SwapClear

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Notwithstanding the approval by the Clearing House of any FCM 

Trading Venues, the Clearing House makes no warranty (and will 

accept no liability) as to the effectiveness, efficiency, performance or 

any other aspect of the services provided by any FCM Trading Venue 

or the timeliness or otherwise of the delivery of any FCM SwapClear 

Transaction details by that FCM Trading Venue. Such matters form 

part of the relationship between the FCM Clearing Members and that 

FCM Trading Venue.

The Clearing House will process any FCM SwapClear Transaction 

reported to it by an FCM Trading Venue on an “as is” basis, and 

subject to the FCM Rulebook, may register any FCM SwapClear 

Contract arising from such FCM SwapClear Transaction on the basis 

of the data provided to it by the FCM Approved Trade Source System 

and the relevant FCM Trading Venue. The Clearing House has no 

obligation to verify that the details received properly reflect the trade 

entered into by the relevant Executing Parties or that the FCM Trading 

Venue is correctly applying the format messages or classifications that 

the Clearing House has prescribed.

The Clearing House accepts no liability for any error within or 

corruption of any data sent by an FCM Trading Venue to the Clearing 

House or any delay in or failure of the transmission of such data to the 

Clearing House. In the event that the Clearing House registers any 

FCM SwapClear Contract on the basis of incorrect or corrupted data 

recorded by it or sent to it by an FCM Trading Venue, the FCM 

Clearing Member concerned shall be bound by the terms of such FCM 

SwapClear Contract. The Clearing House shall use its reasonable 

endeavors to assist the relevant FCM Clearing Members in reregistering the trade on the correct basis but the Clearing House shall 

not be liable to the FCM Clearing Member or anyone else with regard 

to the registration (or lack of registration or re-registration) of any such 

FCM SwapClear Contract.

Open Access

The Clearing House provides access to FCM Approved Trade Source 

Systems, and FCM Trading Venues and FCM Approved Compression 

Service Providers on an open and non-discriminatory basis.

(e) Registration of New Trades and Backloaded Trades

(A) New Trades:

The following section does not apply to Backloaded Trades, which are 

dealt with in Section 2.1.3(e)(B) below. 

As a precondition of registering an FCM SwapClear Contract resulting 

from an FCM SwapClear Transaction other than a Sub-Block Trading 

Venue Transaction, the Clearing House will require the FCM Clearing 

Member in whose name such FCM SwapClear Contract is to be 
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Appendix II 

LCH Limited Procedures – Section 2C – SwapClear Clearing Service

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LCH LIMITED

PROCEDURES SECTION 2C

SWAPCLEAR CLEARING SERVICE
Clearing House Procedures SwapClear 

Service 

LCH Limited © 2023 - 15 - JuneApril 2023

received properly reflect the trade entered into by the relevant Executing Parties 

or that the Trading Venue is correctly applying the format messages or 

classifications that the Clearing House has prescribed.

The Clearing House accepts no liability for any error within or corruption of 

any data sent by a Trading Venue to the Clearing House or to a SwapClear 

Clearing Member or any delay in or failure of the transmission of such data to 

the Clearing House. In the event that the Clearing House registers any 

SwapClear Contract on the basis of incorrect or corrupted data sent to it by a 

Trading Venue and accepted (whether automatically or manually, as applicable) 

by a SwapClear Clearing Member, the SwapClear Clearing Member concerned 

shall be bound by the terms of such SwapClear Contract. The Clearing House 

shall use its reasonable endeavours to assist the relevant SwapClear Clearing 

Member(s) in re-registering the trade on the correct basis but the Clearing House 

shall not be liable to a SwapClear Clearing Member or to any other party with 

regard to the registration (or lack of registration or re-registration) of any such 

SwapClear Contract.

1.3.5 Registration of New Trades

The following section does not apply to Backloaded Trades, which are dealt 

with in section 1.3.6 below.

Prior to it registering a SwapClear Contract resulting from a SwapClear 

Transaction other than a Sub-Block Trading Venue Transaction, the Clearing 

House will require the SwapClear Clearing Member in whose name such 

SwapClear Contract is to be registered to transfer to the Clearing House 

adequate Collateral in respect of initial margin requirements, variation margin 

requirements, and/or the settlement payment obligations (as applicable) relating 

to such Contract as a precondition to registration (taking into account any Client 

Buffer and/or SwapClear Tolerance, if any). In accordance with Regulation 

55(e)(iv) (Registration of SwapClear Contracts), a SwapClear Clearing 

Member becomes obligated to transfer such Collateral (taking into account any 

Client Buffer and/or SwapClear Tolerance, if any) to the Clearing House at the 

time when the relevant SwapClear Transaction (that is not a Sub-Block Trading 

Venue Transaction) has been submitted or deemed to be submitted (as 

applicable) by the SwapClear Clearing Member and such SwapClear Clearing 

Member shall transfer such Collateral to the Clearing House prior to registration

of the resulting SwapClear Contract. In respect of a SwapClear Contract 

resulting from a SwapClear Transaction that is a Sub-Block Trading Venue 

Transaction, the SwapClear Clearing Member in whose name such SwapClear 

Contract is registered shall transfer to the Clearing House sufficient Collateral 

in respect of such SwapClear Contract at such time after the registration of such 

SwapClear Contract as the Clearing House shall require.

Notwithstanding the foregoing (i) if the Clearing House registers a SwapClear 

Contract resulting from a SwapClear Transaction that is not a Sub-Block

Trading Venue Transaction where one or both of the relevant SwapClear 

Clearing Members has not provided sufficient Collateral prior to registration, 

the SwapClear Clearing Members shall be bound by the terms of the SwapClear 

Contract relating thereto arising under Regulation 55 and any other applicable 
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Service 

LCH Limited © 2023 - 16 - JuneApril 2023

provision of the Rulebook, and (ii) if the Clearing House rejects a SwapClear 

Transaction that is a Sub-Block Trading Venue Transaction for reasons of 

insufficient Collateral, the Clearing House shall not be liable to any SwapClear 

Clearing Member or anyone else with regard to the registration (or lack of 

registration or re-registration) of any such SwapClear Transaction.

Upon a SwapClear Transaction being submitted to the Clearing House for 

registration, the Clearing House will determine whether to accept or reject the 

SwapClear Transaction within the required timeframe under all Applicable 

Law.

Where the Clearing House determines to accept the SwapClear Transaction, 

registration shall occur immediately and the SwapClear Transaction shall be 

automatically replaced with (as applicable) (i) two separate SwapClear

Contracts, one between the relevant SwapClear Clearing Member and the 

Clearing House and the other between the same or another SwapClear Clearing 

Member and the Clearing House, or (ii) one SwapClear Contract between the 

relevant SwapClear Clearing Member and the Clearing House and one FCM 

SwapClear Contract between the relevant FCM Clearing Member and the 

Clearing House. The SwapClear clearing system will respond, after processing, 

with a message confirming the registration. The registration notification 

message will be sent using the SwapClear Clearing Member reporting system 

and/or the FCM Clearing Member reporting system (as applicable) (including 

by way of the originating Approved Trade Source System). The definitive 

report of a registered SwapClear Contract will be shown within the SwapClear 

Clearing Member reporting system (see Section 1.1.3) on the SwapClear 

Clearing Member reporting account.

Non-Standard Fixing Offsets for SwapClear Transactions

SwapClear Clearing Members may submit for registration SwapClear 

Transactions that are OIS transactions with non-standard fixing offsets of [-1 to 

-10] Business Days, where the fixing for any Business Day ‘i’ in an interest 

period is equal to the fixing in respect of the Business Day falling [-1 to 10] 

Business Days prior to such day ‘i’. For the avoidance of doubt, SwapClear 

Contracts registered as OIS transactions with non-standard fixing offsets will 

retain the underlying set of compounding coupon sub-periods and their 

respective weights.

Open Access

The Clearing House provides access to Approved Trade Source Systems, and

Trading Venues and Approved Compression Services Providers on an open and 

non-discriminatory basis.

1.3.6 Backloading of Existing Trades

A SwapClear Transaction that has a Trade Date of greater than ten calendar 

days prior to the date of presentation of such SwapClear Transaction to the 

Clearing House for clearing is considered a backloaded trade by the Clearing 

House (a "Backloaded Trade"). Due to the nature of Backloaded Trades,