VIA CFTC PORTAL

24 May 2016

Mr Christopher Kirkpatrick

Commodity Futures Trading Commission

115 21st Street NW

Three Lafayette Centre

Washington DC 20581

LCH.Clearnet Limited Self Certification : Election of eligible products by SwapClear Clearing Members

Dear Mr Kirkpatrick

Pursuant to CFTC regulation §40.6(a), LCH.Clearnet Limited (“LCH”), a derivatives clearing organization registered 

with the Commodity Futures Trading Commission (the “CFTC”), is submitting for self-certification changes to its rules 

which codify the process for SwapClear Clearing Members (“SCMs”) and Futures Commission Merchant Clearing 

Members (“FCMs”) to elect eligible SwapClear Contracts.

Part I: Explanation and Analysis

LCH’s SwapClear service proposes to make rule changes which will codify the existing requirement for SCMs and 

FCMs to elect, in advance of clearing, products from within the SwapClear eligibility criteria which it will clear. Such 

election will be approved by the Clearing House, and will be a precondition to the registration of a SwapClear 

Transaction. The rule change will set out that a SwapClear Contract that is submitted but is not within the scope of 

an existing formal election may be rejected by the Clearing House. The changes also set out the formal process for 

such elections. 

The rule changes will go live on, or after, June 10, 2016.

Part II: Description of Rule Changes

Section 1.3.1 of Procedures Section 2C and Section 2.1.3(a) of FCM Procedures have been amended to include

identical wording which sets out the process which SCMs and FCMs must follow in order to provide the Clearing 

House notice of the type of SwapClear Contract which may be submitted for registration. Further it sets out that 

such election will be approved by the Clearing House, and that any SwapClear Contract not part of pre-approved 

eligible notice may be rejected by the Clearing House. 

The text of the changes to Procedures Section 2C (SwapClear) are attached hereto as Appendix I and FCM 

Procedures are attached as Appendix II.

Appendix I

Procedures Section 2C (SwapClear)
Clearing House Procedures SwapClear Service 

LCH.Clearnet Limited © 2015 - 4 -

December 2015

Transaction. For the avoidance of doubt, an Executing Party may appoint a 

third party to present details of a SwapClear Transaction to the Clearing House 

on its behalf.

Prior to and as a precondition to the registration of an eligible SwapClear 

Transaction, the relevant SwapClear Clearing Member must provide notice to

and receive approval from the Clearing House (or have previously provided 

such notice and received such approval), in such form as determined by the 

Clearing House in its sole discretion, with respect to each type of SwapClear 

Contract to be submitted for registration (be it with respect to tenor, currency 

or other eligibility criteria). Notwithstanding anything herein to the contrary, if 

(i) notification pursuant to this paragraph is not received by the Clearing 

House, (ii) the relevant SwapClear Clearing Member does not receive 

approval from the Clearing House to register the relevant type of SwapClear 

Contract or (iii) such approval granted pursuant to this paragraph has been 

rescinded by the Clearing House, the Clearing House may, in its sole 

discretion, reject the registration of such SwapClear Transaction.

1.3.2 Clearing House Notification

In the case of a SwapClear Clearing Member which has been nominated to 

register a SwapClear Transaction on behalf of a third party Executing Party 

other than a SwapClear Dealer, the Clearing House will (only where such 

SwapClear Transaction is not a US Trading Venue Transaction) provide 

notification to such SwapClear Clearing Member of the relevant SwapClear 

Transaction and that it has been so nominated, via member reports, the 

ClearLink API or otherwise (the "Notification"). Where a SwapClear Clearing 

Member is nominated to clear both SwapClear Contracts arising from the 

registration of such a SwapClear Transaction (whether for itself or a third 

party Executing Party) in the capacities described in this paragraph, such 

SwapClear Clearing Member will receive two separate Notifications from the 

Clearing House in relation to such SwapClear Transaction. In all other cases, 

no Notification will be provided to any SwapClear Clearing Member.

In respect of a SwapClear Transaction that is not a US Trading Venue 

Transaction, following receipt of a Notification, a SwapClear Clearing 

Member may choose to grant or refuse consent to register the SwapClear 

Transaction. It is a condition for registration of such a SwapClear Transaction 

that a SwapClear Clearing Member grants a separate consent (each a 

"Necessary Consent") in respect of each Notification received by it in relation 

to the registration of such SwapClear Transaction. The Clearing House has an 

automated system which it operates on each business day (currently at or 

around 8 pm (London time)) for the purposes of rejecting SwapClear 

Transactions which have been presented for clearing but in respect of which 

any Necessary Consent has not been notified to the Clearing House prior to 

the LCH Cut-off Time. The "LCH Cut-off Time" in respect of a SwapClear 

Transaction will be the time on the business day following the day when the 

relevant SwapClear Transaction was presented for clearing at which the reject

system is operated by the Clearing House and the relevant SwapClear 

Transaction is itself rejected by such system. If a SwapClear Clearing 

Member has not notified the Clearing House of a Necessary Consent by the 
Appendix II

FCM Procedures
FCM Procedures FCM SwapClear

- 13 -

December 2015March 2016

2.1.2 Operating Times And Calendars

(a) Opening Days

The Clearing House will publish a circular detailing the days on which 

the FCM SwapClear clearing system will be open.

(b) Opening Hours

Unless notified otherwise, the FCM SwapClear clearing system will be 

operational during the following hours:

05:00 London time to 19:00 hours New York time (a “Business Day”).

However, FCM Clearing Members should note that FCM Acceptances 

of an FCM Notification submitted during a Business Day shall be 

accepted by the Clearing House until 19:01 New York time on the 

following day. The Clearing House will notify FCM Clearing 

Members in the event that the FCM SwapClear clearing system is 

scheduled for closure for operational or other reasons (including 

compression runs).

(c) FCM SwapClear Clearing System Calendars

The FCM SwapClear clearing system uses the SwapsMonitor Financial 

Calendar for its processing. This will require all FCM Clearing 

Members to be licensees of the SwapsMonitor Financial Calendar. 

The calendars, as applicable to the FCM SwapClear clearing system, 

will be available online for inspection and for file download from FCM 

Clearing Member Reporting (see Section 2.1.1(c)).

2.1.3 Registration

(a) Submission for Registration

Prior to and as a precondition to the registration of an eligible FCM 

SwapClear Transaction, the relevant FCM Clearing Member must 

provide notice to and receive approval from the Clearing House (or 

have previously provided such notice and received such approval), in 

such form as determined by the Clearing House in its sole discretion, 

with respect to each type of FCM SwapClear Contract to be submitted 

for registration (be it with respect to tenor, currency or other eligibility 

criteria). Notwithstanding anything herein to the contrary, if (i) 

notification pursuant to this paragraph is not received by the Clearing 

House, (ii) the relevant FCM Clearing Member does not receive 

approval from the Clearing House to register the relevant type of 

SwapClear Contract or (iii) such approval granted pursuant to this 

paragraph has been rescinded by the Clearing House, the Clearing 

House may, in its sole discretion, reject the registration of such FCM 

SwapClear Transaction.