AFTAs 2020: Best New Technology Introduced Over the Last 12 Months (Trading and Risk)—LSEG Technology

Since 2016, LSEG has been upgrading London Clearing House’s (LCH’s) core technology stack and this year the cash equities business, EquityClear Ltd., went live with LSEG Technology’s Millennium Clearing and Millennium Risk (MCCP) platform on March 9, during a period that saw extreme volatility. The technology revamp has sealed LSEG’s AFTA win for the best new technology category for trading and risk over the last 12 months.

In its initial go-live week at EquityClear, the MCCP platform processed over 8 million trades, which is more than two-and-a-half times the historical daily average. Powered by graphical processing units, the platform can now process risk computations faster than its predecessor and enables EquityClear to gauge exposure and margin changes on a trade-by-trade basis, with Historical Value at Risk (HVaR) running a full revaluation. 

While margin runs are typically triggered at end-of-day, intraday, or on an ad hoc basis, it has now been extended to trigger at 10-minute intervals, providing needed assurances during periods of market volatility.

Alex Krunic, head of equities at LCH, says the clearing and settlement business needed a platform that could perform better in terms of scale and resiliency, and one that facilitated continuous netting. “The new platform is really on a completely different level in terms of its ability to process real-time clearing, settlement and risk in a fraction of the time compared to the old technology. And to us, it is all about understanding the risk that our members and we are facing across the entire portfolio, and that has improved massively,” says Krunic. 

The technology operates on a 24X6.5 basis, connecting to 16 trading venues and 19 depositories across Europe, and servicing 250 global participants. Beyond the equities clearing business, LSEG Technology and LCH are scheduled to roll out the second phase of the MCCP platform for its Cleared Contracts for Difference (CFDs) products for equity swaps in the first half of 2021, while in the future the firms intend to extend the platform to LCH SA, the France-registered clearinghouse.