LCH has selected New Change FX (“NCFX”) to supply independent FX mid-rates for its ForexClear service. NCFX will provide an accurate and impartial measurement of the underlying spot rate at the point of expiry for FX options. LCH is planning to extend its ForexClear service to offer FX Options clearing in 2017, subject to regulatory approval.
The NCFX reference rate is a highly aggregated mid-rate published every 50 milliseconds in 71 currency pairs. The rate accurately reflects the market mid-rate without being available for trading, thereby ensuring an independent reference price.
Andrew Woolmer, CEO of NCFX, said, “It is important that clients are able to use an independent reference price when settling derivatives contracts. By using the NCFX mid-rate, both parties to a transaction can be certain of the reference price being accurate and neutral. NCFX are delighted that LCH have selected the NCFX mid- rate as the reference point for this important market. NCFX offer a highly accurate reference rate that is not available for trading, which makes it uniquely independent. Using an independent reference rate improves transparency and promotes market integrity.”
Notes to Editors
New Change FX is an independent company dedicated to the measurement of foreign exchange markets in order to deliver transparency and eliminate costs. New Change FX calculates an independent live benchmark mid-rate 2,500 currency pairs in the spot and forward markets enabling market users to measure the full cost of their foreign exchange execution. Unlike other benchmarks this benchmark is not available on a trading platform and therefore cannot be directly manipulated. This ensures compliance with the PRIIPs FX TCA rules.