The London Stock Exchange Group’s (LSEG) LCH SA has received regulatory approval to clear cash-settled Bitcoin index futures and options contracts. LCH SA will offer these clearing services through its new dedicated service, LCH DigitalAssetClear.
These services are available for contracts traded on GFO-X, a UK-based digital asset derivatives trading venue regulated by the Financial Conduct Authority (FCA). LCH DigitalAssetClear is a fully segregated clearing service supported by a segregated default fund, tailored risk management model, and a dedicated set of clearing rules.
LCH SA announced in a press release that the approval was given by the French national competent authorities (ACPR, Banque de France, and AMF) and the European supervisory authorities (EMIR College, ESMA). Corentine Poilvet-Clédière, CEO of LCH SA, explains that the clearing service is designed to enable institutional market participants to trade and clear Bitcoin index futures and options within a familiar regulatory framework.
The cash-settled Bitcoin index derivatives cleared through LCH DigitalAssetClear will be based on the GFO-X/Coin Metrics Single Asset Real-Time Bitcoin Index (GFOXBR). This is a reference rate compliant with the EU Benchmark Regulation that reflects the US dollar price of Bitcoin. Firms will be able to trade futures and options directly on the Bitcoin reference index. LCH DigitalAssetClear is scheduled to launch later this year.