LCH SwapAgent has selected Murex’s MX.3 capital markets platform for trade processing, valuation, margining and member reporting.

LCH SwapAgent was launched last year by LCH, a central counterparty clearing house, as a new centralised service for the non-cleared derivatives market.

In this latest deal with Murex, LCH SwapAgent “aims to improve efficiencies” in the bilateral OTC market by eliminating disputes when establishing the value of a trade. Rather than each bank using internal models to compute trade valuation and margins, they post the trade in LCH SwapAgent and use the valuation models of a shared analytics platform, Murex, to receive a common valuation, sensitivities and margin.

LCH SwapAgent will use Murex’s analytics models to run pricing and compute sensitivities that establish the common trade valuation. For each trade processed by LCH SwapAgent, the Murex platform calculates the variation margin and generates sensitivities that contribute to the overall margin requirement for each party, eliminating pricing disputes in anticipation of the regulatory overhaul.

Murex is already a provider of the underlying technology for LCH’s SwapClear and ForexClear services.

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