LME Clear has today announced enhancements to its margin collateral services. Members will now benefit from more flexibility and efficiency in their use of Offshore Renminbi (CNH) and Warrants as Collateral.
The amount of CNH that can be held as collateral by each member has been increased by 50%. This change follows an increase to the interest paid on CNH held as collateral that was introduced in October last year to make the use of CNH more attractive and increase options for members. The revised interest rate will be retained until at least the end of 2026.
In addition, the settlement time for lodging and withdrawing CNH will be moved from T-2 to T-1, making it easier for members to use CNH to support their clearing business.
LME Clear is also refreshing its capabilities for providing Warrants as Collateral, and is pleased to announce that it is now able to accept warrants as collateral for underlying metal stored in Hong Kong, in addition to the eight existing locations.
Michael Carty, LME Clear CEO, said: “Over the past year we have made a number of enhancements to our member margin collateral service for clearing. The changes announced today will particularly benefit Asian members and users who wish to use CNH, as well as boosting the important role played by warehouses in Hong Kong.
“We continue to explore various options to support the enhancement of our collateral service. Warrants as Collateral brings specific benefits to our market by allowing members to use their metals holdings to support clearing, whilst CNH cash collateral enhancements are central to our ongoing efforts to support our Chinese market participants.”
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Notes to Editors
- LME Clear accepts warrants as collateral for underlying metal held in England and Wales, Belgium, Hong Kong, Malaysia, Netherlands, Singapore, South Korea, Taiwan and the USA. Details can be found on Warrants as Collateral.
- LME Clear previously required two days (ie T-2) to settle CNH provided as collateral.
- The LME has accepted Offshore Renminbi as eligible cash collateral since 2015. Details can be found on renminbi as collateral.
Contact us
For further information or to speak to an LME spokesperson, please contact:
Miriam Heywood
+44 (0)7554 667 846
Joseph Eyre
+44 (0)7740 413 234