By way of background, under CFTC Regulation, any account maintained by an FCM Clearing Member for the benefit of its affiliate is deemed to be part of the Proprietary Account of the FCM Clearing Member, rather than a client account.

As a result, LCH.

Clearnet therefore would like to provide early notice to its FCM Clearing Members that the affiliate service will cease to be available for future clearing arrangements under the FCM Rulebook. Note that trades submitted by a branch, which is part of the same legal entity as the clearing member, are automatically booked into the proprietary account. The current affiliate clearing arrangements for FCM Clearing Members will remain in place until the date on which the revisions to the FCM Rulebook for EMIR come into force.

This is expected to be in late or early , and the exact timing of which will be the subject of further communications. An affiliate of an FCM Clearing Member that believes it must clear via its FCM Clearing Member is invited to contact its Account Manager of LCH.

Clearing Members will need to take their own legal advice on whether or how to clear Affiliate business and comply with EMIR.

These changes will not apply to LCH. Clearnet LLC, where the affiliate service will continue to be available. Any questions concerning this notice should be directed to your usual business representative at LCH.