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Collateral management

LME Clear has designed a Secure Payment System (SPS), in collaboration with the Bank of England and Settlement Banks.  A Clearing Member must provide LME Clear with a mandate from one or more of the approved LME Clear Settlement Banks to allow LME Clear to access appropriate funds for margin and associated purposes. All Members are required to have contingency payment arrangements in place.

Members can associate any permutation of Standard Settlement Instructions (SSI)s to position accounts within the Clearing System, giving them flexibility regarding their cash management.  A Member does not need separate accounts to fund house business separate from client business or even separate bank accounts for each ISA – however, if that is a requirement, LME Clear can support it.

Members are able to manage their collateral (cash and non cash) through the LME Clear GUI. A variety of drop down lists providing access to real time information re acceptable collateral is available to a member. Choosing the preferred form then creates the appropriate SWIFT instructions to transfer the cash/non cash.

Margin will be called in USD, however, Members can prefund their account in USD, EUR, GBP, JPY, CNH or any of the acceptable non cash collateral. A variety of parameters are available to Members and include the capability to utilise the auto-repay functionality as appropriate. LME Clear will call any outstanding fund including margin in GBP on a USD bank holiday.