ASX vs LCH in race to be Australia's OTC clearer

Australia’s financial regulators are leaning towards mandatory clearing for the local interest rate derivatives market – and may also conclude that any central counterparty serving the market has to be based locally. It’s the latest evidence of fragmentation in the rapidly expanding over-the-counter clearing industry. Joti Mangat reports

Locals of a certain vintage might call it a blue. Or a barney. In other countries, it would just be called a fight – LCH.Clearnet and the Australian Securities Exchange (ASX) are going head-to-head to be the central counterparty (CCP) for Australia’s domestic over-the-counter derivatives market, subject to the outcome of a consultation process launched by Australia’s Council of Financial Regulators (CFR) in June, which proposes mandatory clearing for Australian dollar-denominated interest rate