London Stock Exchange Group plc (LSEG) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the LSEG Post Trade webinar hosted by Daniel Maguire, Head of LSEG Markets; and Isabelle Girolami, CEO, LCH. [Operator Instructions] I would like to remind all participants that this call is being recorded. [Operator Instructions] I will now hand over to Peregrine Riviere to begin.

Great. Thanks very much, and welcome, everyone. Good morning, or good afternoon, wherever you are, and welcome to our webinar. This is very much a teach-in rather than a mini Capital Markets Day. I think we've become quite conscious over the last year or so, there's a very wide range of knowledge around our Post Trade activities. And we're particularly keen to make sure some of our newer shareholders can get up the curve as far as they need to in understanding why we exist, how we do business and what the growth drivers are at Post Trade. So I'm delighted that Daniel and Isabelle are joining us. They're going to present for 45, 50 minutes, which will leave 40 minutes time for Q&A. So please do submit your questions, and we'll do our best to answer them. And with that, I'll hand over to Daniel. Thanks.

Thanks, Peregrine. Hi, everybody. I'll jump straight in. So let me just quickly give you a heads up on the agenda for today, so you know what we are going to be talking. So first of all, I'm going to give a high-level overview of what LSEG Post Trade is across the different aspects of the business. Really, this is a level set. And then we're going to go into a bit of a teach-in on some of the fundamentals of clearing, some of the key market drivers for the business, both now and looking forward. After that, I'll hand to Isabelle. Isabelle will step through business by business within the clearinghouses that we have. And then I'll finish with talking about Post Trade solutions and some of our goals, ambitions, aspirations and progress that we've been making to date there. And then finally, I'll just highlight some of the additional longer-term growth opportunities. So that's just very briefly what we intend to cover today. But to Peregrine's point, really, welcome Q and we'll have, hopefully, a lot of answers for you as well. So let me go a little back to basics, if I may. I'll just start with just as a level set, what is a central counterparty and why will you use that. You can see on the slide some interesting diagrams on the left. I think the key point to really take away here, number one, what is a central counterparty? It is a central counterparty that is sitting in the middle of the market and is reducing your counterparty risk. It is providing default protection. As you can see on the right-hand side, as you look at the screen, in the world of bilateral, so where people are trading point to point over the counter or otherwise, you have many, many bilateral relationships. And as time has gone by, those are things that have to be collateralized, and you have counterparty exposure in doing that. If you put a clearinghouse, a CCP, central counterparty, at the middle of that, very quickly, as you trade with each other, you give those trades up to the clearinghouse. And the CCP, you'll hear us say this time and time again, will become the buyer to every seller and the seller to every buyer, guaranteeing the trade in the case of any kind of default or in good times and peace time, making sure flows of profits and losses are going across the piece. So that's fundamentally what a clearinghouse is doing, and that's been around since the late 1800s, but we've been applying different asset classes into these OTC as well as exchange traded. Very quickly, another benefit you get is when you put these things together, you get a lot of netting. So what does that mean? It means rather than having margin with 5 counterparties in this example, you have it with 1, and you get the longs and the shorts offsetting. So it becomes efficient from a margin standpoint as well as from a risk reduction standpoint. And then finally, it becomes much more efficient from an operational standpoint as well, which is a very good byproduct as well, I guess, in terms of having 1 line where you have to pay margin rather than 5 and so on and so forth. You can do this on an exchange traded basis or over the counter on different platforms. And I think the key thing to take away about this is, yes, you get netting. But also when you face somebody as a counterparty bilaterally, you have an exposure to that counterparty. Generally speaking, if your exposure to a clearinghouse is weighted much less from a capital consumption standpoint relative to something where you have an exposure to a bilateral counterparty, so you're getting reduction and netting in margin, but you're also having the -- if you will, the footprint in your capital or your balance sheet that your trading is taking up. It's reducing by facing a clearinghouse. So as a headline, a unit of risk in a clearinghouse is always; going to be more capital or balance sheet efficient relative to something bilateral. That said, clearing isn't the answer for everything, which we'll come on to a little bit later on. If I could now talk just a orientation around the clearinghouse, and the eagle eye will notice, we have a couple of clearinghouses, 1 based in Paris, 1 based in London, but both are increasingly global by their nature. And as part of a global group, LSEG, we've got global customers but, most importantly, we also now have much more global products, and we're overseen by global regulators. So what you can see here we, across all the -- a lot of the, if not all, most of the important asset classes from interest rates and inflation to foreign exchange, to fixed income repo, to credit, to equities and so on. And within that, we are now touching customers, be them as direct clearing members or buy-side clients through a clearing member in over 60 countries, and that's growing at a pace. We have 235 members of our services, are directly connected to this and about 5,000, approaching 6,000 clients, coming through those members. But importantly, so that's the participants. But product-wise, we also now clear in different forms in our foreign exchange and interest rates 27 different currencies, and we've also cleared 14 sovereign debts. So very global by its nature when meeting the customers where they are. And we have a very strong track record of growth and delivery of new business initiatives, new improvements and new products and services. So you can see on the right-hand side that the collateral balances, the margin and the risk and the management has been growing at a pace. The volume of trades and flow that we have has been growing materially. And then importantly, from an income standpoint, it's not just about trades and collateral. It's about growing the top line, and we have a very strong track record in the last 4 or 5 years, 10%. And if you look over the last 10 years, more like 19% growth. So I guess that's a sort of a 30,000 view -- 30,000-foot view of the business of LCH, and it's very much part of a multi-asset class offering that we have as an overall group. If I zoom in a little bit and bring it into more detail, let's look at what we sort of -- how we think about the business maybe at 10,000 feet. On the one hand, we have what I would refer to as core financial market infrastructure, FMI, as I'll refer to it going forward, core FMI. That's really the clearing business and the regulatory reporting. I've touched quite a lot on what that is, but it's critical market infrastructure, long-term partner. As you'll probably be aware, a lot of it was previously owned by the members, the customers who then, over time, sold down their share and brought that into LSEG. But it's massively reducing your market risk, it's improving liquidity through the clearing side, and it's also really importantly leading industries through many times of crisis, being on default, more on that a little bit later, or in just more sort of market volatile -- sort of volatile markets and environments that we have to live in and increasingly happening on more regular occurrence than the past. But on the right-hand side, what I'd refer to is not regulated, but less regulated, new developing services. We took a view a number of years ago that clearing, whilst we're very fond and enjoy clearing, there's much more route that we can turn our hand to, and maybe clearing isn't the answer for every product in every asset class. So over the last number of years, we've been building out in conjunction with our customers in a similar operating model with the industry, building out and acquiring a few businesses and integrating those that are mentioned here, Acadia and Quantile, to build out these condemnatory Post Trade services, really, for what I'd refer to as the bilateral, so the noncleared market, but in a similar vein looking at trade processing, margin, settlement and capital and risk optimization for the customer. So really, taking all of our wherewithal, all our experience and our heritage and our background in derivatives and securities for clearing, but really applying that across into the bilateral or the uncleared route via Post Trade solutions. And ultimately, whilst not regulated, the more important these services become, the more they'll become a node in the marketplace. Perhaps, over time, the more highly regulated they will become as well, much the same as clearinghouses being important nodes in the industry. So that's kind of roughly how we sort of split it, core financial market infrastructure and then Post Trade solutions. What does it mean to operate systemically critical financial market infrastructure? It's hard to sort of really draw a picture that brings that to life. But what we intend to do here just give you sort of a very high-level picture of our connectivity globally across the market. We are convening market participants, clients, I refer to just to give some of the nomenclature, that's buy-side clients, asset managers, hedge funds, pension funds, insurance funds and the like, clearing brokers, clearing arm of the major banks out there who we refer to as members. Clearing brokers are the avenue, the broker who is bringing the clients into the clearinghouse. And then members, really, the dealers or the bank side on the house side of the various different banks. So a large constellation of people in that. But also, we have a lot of connectivity to other market infrastructure providers as well. Trading venues, exchanges, multilateral trading facilities, custodians and settlement depositories and the like. So really sitting in the middle of that has been central counterparty. But in addition, on the left-hand side, as you look at it, industry trade groups. We work very closely with the industry at large, be it the ISDA or the FIA group, amongst many others as well, I think too many to mention. And similarly, with the position and the criticality of what we do, we find ourselves somewhat in the media and the press. So we embrace that as well. And then finally, and probably really importantly, convening around regulatory policymakers in central bank. Running these businesses is a highly regulated business. However, in addition -- sorry, there's a Teams things popping up on the screen folks. In addition to running these things, we're also very much early stage in the formation of policy, as we're looking at various different rollouts of regulation or policies that are going to be rolled out across the globe or in different jurisdictions. So very heavily involved with that. And I think the final point on this slide before we move on, yes, we're a convenor or a thought leader and innovator. And then when you think about the person who we're speaking to, and a lot of these firms and a lot of the customers, it's the head of trading, it's the heads of resource management, it's the heads of treasury, CBA or various bank resource management. So I think it's important to show you, this isn't really just a Post Trade thing. This is really our customer base and our relationships. So really, the friend kind of things, the trading and the P&L owners within the various organization to your customers. If I try and put this in the context of the overall group, the group LSEG, what you can see is we touch in a lot of different areas. And generally, most people will imagine, Post Trade comes at the back end of this. Now that's true to a point, but Post Trade and capital optimization is something that happens pre, at and post trade. So perhaps, if I was to read through all this, but it will get too complicated, I'd be saying that Post Trade really is across the spectrum and pre-trade execution Post Trade. And why is that? When you are putting a trade on, before you put a trade on, you need to understand where or if it's going to be cleared. And before you do that trade as well, you need to have pre-trade checks around credit or collateral availability, all things that a clearinghouse does. So in reality, you are thinking about where the trade is going to reside post-trade, pre-trade and that trade. And the economics of putting the trade in one clearinghouse versus another, sometimes, you've seen this sort of manifest itself in something known as CCP basis. CCP basis is something that basically shows the difference of the cost of putting the trade in one clearinghouse versus another. And that's then represented in the actual execution price of a trade. So probably too much detail, but fundamentally, where you put the trade post trade will have a material impact on pre and at trade in terms of how that trade is priced and the bid offer around that trade. And I guess, what you can see in all of this, I mentioned the global and the multi-asset class at the bottom. But what we're really doing is linking up with all the different elements of the group here, and we'll have some more detail a little bit later on, on how we do that. But fundamentally, this Post Trade business is approaching about 15% of the revenue, 15% of the EBITDA of the group, and that's been growing I think nicely over the last few years. In the next section, I'm going to take you back a little bit to some more first principles. Some of you will know this, but I'm conscious there are people that are a little bit newer to the story. So let me just give a little bit more context around where we've come from probably in the last sort of 15 years. If we can just move forward, please. So sometimes, there is a bit of a misnomer that a clearing business is 100% regulatory driven. I'm not going to deny there is some regulatory tailwinds around this. But actually, if you sort of look at the last 10 years, a lot of the drivers have been much more about a drive for efficiency in capital and in balance sheet. So let me just talk you through this a little second. In 2008, a little bit of a watershed moment, Lehman Brothers, Bear Stearns and then subsequently, we've had other defaults as well. But then, we have the G20, a very seminal moment in Pittsburgh, September 2009, and they made the decision and the decree that OTC derivatives, over-the-counter derivatives, must be collateralized, a; and b, some of those not just collateralized, they must be cleared. And that was really the starting point of all these uncleared margin rules and clearing mandates. It took various forms in the U.S., Dodd-Frank regulatory reform in 2010, EMIR reform subsequently and other parts around the world as well, plus MiFIR and MiFID. But we saw 4, 5, 6 currencies in interest rates and credit being forced to be mandated to clear for certain shape and sizes of customers. But as I referred to it, there were 27 currencies cleared. There are 14 debts cleared. There we are. We are way beyond regulatory mandate here and what is really driving that. On the second half, we refer to Basel II and III uncleared margin rules and the like. And at the far end, things like counterparty exposure method to -- and the standard of project counterparty credit, G-SIB and leverage ratio, lots of acronyms. Headline derivatives are consuming -- OTC derivatives are consuming capital from a bank's perspective. And if a customer trades with them, a buy-side customer, they are still leaving an imprint on the balance sheet and capital consumption of that bank. So these derivatives, not only are some of the mandated but, in addition, they are leaving an imprint on the balance sheet and capital consumption of a lot of the major firms. So there's been a real push to find ways to make those more efficient. Clearing is clearly one of the answers to that, but that is really where we started to move into other spaces as well with Acadia, Quantile and SwapAgent and saying maybe we can't clear everything for liquidity or risk reasons. But what we can do is bring a lot of the tools and capabilities we've developed in the derivatives, securities markets and clearing and start to apply those in the bilateral space and reduce the pressure on the balance sheet for a lot of the firms and also bring a lot more efficiency around their uncleared positions as well that have started to attract margin. So headline, there's definitely been some tailwinds over the course of 2008 maybe through 2015, '16 and perhaps a little bit later. But in the last 5 to 6 years, if not longer, we've seen a real push more from a capital and margin standpoint, which are pushing people more and more towards the kind of tools that we've been building and creating both in clearing and in Post Trade solutions. At the heart of what we do, though, and what are you buying? What is the product? We can try and sort of make it many things to many people. But fundamentally, you're buying default protection. You're buying counterparty credit risk reduction. But in order to do that, and when you start to bring all of these elements into a clearinghouse and these nodes, and this is why they've become somewhat caught in the public eye and the political eye sometimes, you're putting a very heavy reliance on these nodes in the industry in the marketplace called clearinghouses. So they have to be uber strong, uber resilient and uber available or hyper-available for all the time. So we've had to build a super resilience capability in the organization to make sure that we can scale and grow as the businesses and the customers grow because nobody expects a clearinghouse not to be working. It has to work every second, every minute of every day. And it has to have scale, it has to be global and has to be able to support the clients wherever they are. But one of the fundamental elements of this that has become increasingly marginalizing conversation is financial risk management. We spent a lot of time with our regulators, with our customers, with policymakers talking about nonfinancial risk because of the importance of these nodes. But financial risk management is absolutely at the core. And we have the gold standard. Credit risk, market risk, liquidity risk run through our veins every day. We have to be on top of our game every single day. And how does that really show up? In these kind of black swan-type events when we see defaults or major market stresses, we have to be metronomic. We have to be on our game every minute, every second of every day. And we've had a number of defaults over the course of our history. But fundamentally, what lies underneath this is this gold standard risk model, which we can apply both to cleared and increasingly to uncleared as well. So just quickly going through the default process, and as investors and analysts think about this, when they ask us questions around what's -- what capital do you have at risk, well, the first thing to say is we are super well insulated. We have margin -- initial margin, which is the amount we charge to every contract we clear. We do P&L every day, we call that variation margin. And then what we have is a default -- sorry, a default fund where we do stress levels and we calculate an amount and we hold the default fund. What is that doing? It's protecting in the eventuality of a default. So our default waterfall is as it's often known as a default to pay model. And what are we saying here is if someone defaults, Lehman Brother being one of the more famous ones, the expectation and the intention is that they will pay for their own demise through the contribution of the financial resources they've given to us as a clearinghouse. And in our history since 1888, where we've had more than a dozen defaults, we have never used anything other than the resources of the defaulting party to clean up the defaults and get back to a stable market environment, different default funds for different services. And we also have some of our own skin in the game as well, and that sort of incentivizes us to keep the highest upon high standards from a risk standpoint. So we like to think of ourselves, and we are encouraged by our customers who were ultimately mutualized to make sure that our risk standards are at the highest level. If there is competition on margin or a competition on risk, there's competition on being at the highest standard, not at the lowest standard. So as I said, we've never used any resources other than those as a defaulter. A few events here, just to give you some sort of context of our track record, I mentioned Lehman Brother. That was involved in closing a lot of that portfolio out. But also it's not always about default. It's about being sort of steadfast and metronomic through periods of high turbulence, market dislocation as well. We've seen a lot happening as the central banks opened up their purses during 2020 in COVID. 2016, a lot of market volatility around that. And subsequently, a lot of policy involvement around where things are going to be cleared. We've had, obviously, the ongoing invasion of Russia and Ukraine. We saw things in the U.S. last year as well with Silicon Valley Bank and the regional bank crisis. And then on top of all of this, and I think this for me was a real coming of age for us as a business, LIBOR transition. As a result of all those things, since 2008, we have found ourselves being the central node in the derivatives market. We have a large percentage of the LIBOR indexed wholesale market sitting with us. Working closely with industry associations, customers and the like, we took leadership position in helping the transition from LIBOR to the various different alternative reference rates that came about. And that really was a real major point for us where, historically, we clear what the market trades. Historically, we work with the market. This is where we took the leadership position to help the market move from an old world to new world. And this was in a lot of precision, atom splitting in some ways, but it really put us at the forefront of the industry. We said, hang on a minute. We can help lead the industry. We have an opinion. We have a role to play here, and that's what we continue to lead off with into our new initiatives as well. So in some ways, it encouraged us to be a little bolder in how we think about things and how we think about ourselves as well. But bottom line, our role in all market events, be them default, be them turbulence, be them market dislocation, it's not to have an opinion on them. It's to be steadfast, metronomic and do exactly what's expected of us and not have interference and changes in margin models and introduce surprises into a system that is at the time somewhat fragile. I'd be handing to Isabelle shortly, but I just thought to finish on this section. What are the sort of key market drivers? People often ask me about the cyclical versus secular trends around this business. Are you just a regulated business? Are you just a volatility driven business? And my answer to that is absolutely not. They are good tailwinds, but there are different fundamentals that really drive this business and its performance and its growth. Break it into three areas. One is market trends, one is policy and regulation. And then the final one is creating and innovating and building new things. So as you take a step back, first and foremost, we see ever-growing, never increasing amounts of debt issuance by governments and corporates for that matter, which is raising demand for repos, but also raising demand for swaps and interest rate hedges and inflation hedges. So fundamentally, the input into a lot of the derivatives market is issuance, and we're seeing more and more of this as developed governments are issuing more and more of this. But we're also seeing deepening financial markets in a lot of markets such as Asia, as an example, as the markets evolve and develop even further and being much more pervasive with the derivatives market as well. So we're seeing growth both in some of the more developed markets historically, but also those economies which are deepening their financial markets such as Asia, really growing and creating an ever growing and somewhat insatiable demand for derivatives as well. So those fundamentals that are really driving this in the first instance. As I mentioned, of course, there's market volatility around this. And we're not here to make predictions of whether markets go up or markets go down. Volatility is generally good for our business, but lots of things can drive that. It can be economic sense and sentiment. It can be central bank rate moves. It can be geopolitics. It can be more than that. So we will see intermittent spikes in things which drive volume and drive flow. But fundamentally, it's really the underlying economic activity that drives it. There's, of course, policy and regulation, and I think we look at it through 2 or 3 different lenses. One is there's been mandates. That's pretty straightforward. But there are also capital rules that come in as well, which have been another sort of push in our direction. And as I just mentioned, you could put it in market trends or policy, but really central bank activity as well. So we are a recipient of those elements, and we have a business that is very much exposed to those, but in a sort of all-weather way, be it market up, market down, risk on, risk off, you generally see people expressing that through interest rates, through inflation, through debt issuance or through foreign exchange. And then finally, we aren't a business that sits still and wait for things to come to us. We are constantly investing in our underlying business and our products. Isabelle is going to talk a little bit more about that in a second. But talking some of the different things, moving into the bilateral flow away from cleared, a big departure and a big innovation. But also there's a lot of improvements constantly doing to make our offering more and more attractive to our customers and fundamentally making it more and more valuable and more efficient for them as well. And we'll talk about this in a second. Launching a new U.S. future service, which was going live -- just went live recently with FMX. So you're really seeing a drive from our customers for more optimization of their financial resources, their scarce resources, I think, that is a fundamental and the trend that's not going to go away anytime soon, if ever. And we are constantly investing and adapting to make sure that whatever the economic policy is or the economic activity is, we're building products and services that are going to capture that and bring real value to our customers. So with that, I will hit pause for now. I will hand over to Isabelle, who's going to talk you through some of the various businesses we have and the opportunities, market position and track record. Isabelle?

Thanks a lot, Dan. Hello, everyone, from New York, where I arrived last night. Really excited to be here and be with the team and meeting some of our biggest members and clients. You've heard from Dan about clearing and the role it plays and the market drivers. I thought that on this slide, I will explain to you why LCH. We're a CCP, but why us? What is our right to win? And the first one is around that deep partnership with the market. We have -- it's very much part of our ethos. It's also part of the way we share revenues with some of the market participants, and I'll come back to that in a second, and what that does, and the strong and deep foundation it does is to lead, to co-creation. So we do not -- and codesign. We do not put products on the shelves and then just push the products from the shelves. We codesign with the market participants what is going to work with them. And it's that, that creates the network effect and the adoption much quicker than you would see in other clearinghouses. And -- so that's a very important one for us. The second one is the fact, and Dan alluded to that, that we are very safe, and we're very trusted. We embrace our regulators. So yes, it's a burden. But one, frankly, it's a barrier to entry. And also we embrace them because we want to work with them, and we want to make the market safer. So I think that's a really important point for us. And I would say that's the second sort of big bucket. And the third one is -- that I wanted to mention is that we also deliver value to our clients because we're a global clearinghouse. We are the only global clearinghouse. And there's no other one out there. And we deliver margin efficiency, as Dan said in what he mentioned before. We help reduce the pressure of operational complexity for our members and their clients. We also create for some of the products that we launched a bit of competitive pressure, which the market likes because it allows them to have more pricing power on some of the other providers away from us. So we can move to the next slide. I'm going to be slightly quicker in order to be able to get to the Q&A because I saw some excellent questions in there. On this slide, you've gone through with Dan the sort of time line of what's happened and the market events that have changed the landscape, so I'm not going to go over those again. I just wanted to say that we've always adapted. We've always adapted and more than adapted. We've had over the years, I would say, the foresight to really come early with what we think the market will need to adapt to some of the trends that we're seeing emerging. And that goes back to what I said in the previous slide in terms of the codesign and that ethos of partnership with the market. That allows us to know because we are in contact with them all the time and we work on things with them, what they will require as they see those changes happening in the market. And it's certainly the case for CDSClear. It's certainly the case for ForexClear. It's the case for listed rates as well. They're very happy to introduce a bit of competitive pressure in the system. And for ForexClear, it was clearly coming from a need to adapt to some new regulations that are going to require more capital for them, especially with SA-CCR, but also UMR on the buy side. So it's -- we are anticipating, thanks to our proximity to the market. That's what I would say and summarize. If we can move to the next slide. I wanted to show you what our economic model works. In relatively simple terms, we have nearly 1/4 of our revenues that comes from members fees. And it's a bit like a subscription model. So you have several tiers. You can subscribe to a tier, which allows you to do a certain volume. You can subscribe to a lower tier, which will cap the volume at a lower number. And you can start with one and then move up the ladder to a higher tier as you see that your business is increasing. So that's on the member side. We have another way of making money, which is on the collateral side. We charge a collateral fee, but we also make money from collateral that we collect. And we behave in that. We behave a little bit like a -- for those of you who are really well versed in banking, it's a little bit like a central bank's reserve management unit. So we make money, but with a lot of constraints because we have to remain liquid at every step of the way and every point in time. So this -- we don't take undue risk. We don't invest in undated instruments. We don't take naked counterparty risk. A lot of what we do will be in the form of reverse repos that are going to be relatively short term. But we -- just for you to understand, there's a link between, of course, the way that we manage that collateral and the strategy that we have in the clearinghouse. So not only it's linked to the services, of course, but it's also when we decide to accept a new noncash or new security, for example, in the clearinghouse, we think about what would work for the market and what works with the areas of developments that we want to push for, again, pushed by the market participants. I can give you an example of that. So if we want to do more work because the market is asking us to with the European pension funds, we are going to be thinking about onboarding some securities that are coming from Northern Europe, which are securities that those funds really value in terms of posting. If we want to do more on the Asian side, one of the things that we are working on is to onboard some specific government bonds that are government loans, that are Asian government loans, again, in order to link up with our strategy. So everything is connected. The other way we make money and the half of it, as you can see, is from clients. The clients that Dan was explaining are coming through and via the clearing brokers into the clearinghouse. And there, it's much more as sort of pay-as-you-go transactional fee. We -- on the cost side, so if I forget about the revenue side for a second. On the cost side, we have a profit share with a group of founding members of LCH. And we don't have that for all the asset classes, but we have that for swaps, we have that for FX, and we have that for CDSs. And it served us really well because it helped us cement that partnership with the members and with the market that I was -- that I've mentioned a few times. And it served them well as well because it's been profitable for them over the years. We also have costs, of course, like you would expect in a business like us in risk, in technology, in compliance, in operations. I would say that the majority of the costs that we have, the majority of the teams that we have are really risk and technology and operations teams. Those are the teams that are at the heart of the CCP, running the CCP. Our EBITDA margin is around 50%, and we think it's pretty healthy, and that 50% is after deduction of the profit share that I mentioned before. Now if we go business by business. So let's start with the biggest of our businesses, which is SwapClear. It's the longest established and the business. And -- well, I don't know longest established, I don't know, Dan, maybe equities sort of predates it to commodities if we go back to the 1800s. But the fact is that it is our biggest business without a doubt. And the customers come to us because of its breadth, because of its global reach, because of the cost savings through the savings from a margin efficiency perspective, but also because of peace of mind and the sort of predictability that they have when they deal with us with a service which is so large and so well run. I can say hand on heart that we have the gold standard of the market. We clear 95% of all OTC IRS vanilla products in 27 currencies and all [ tenors ]. The only exception is yen because we do not have the license to clear onshore yen swaps. And so we have the market share in yen, which is the international market share and which is around 47%, 48%. And again, we provide deep pools of liquidity. We offer significant portfolio margin and opportunities. But we also lead, and again, Dan said that before, but in risk management standards. And when you look at all the sort of market events that have happened, the market really values that because the last thing you want when you're facing a CCP is a CCP, which is a bit shaky when you have market events that are coming your way. And we are exactly the leaders. We don't do ad hoc margin calls because we imagine margin in anticipation of shocks. And that has served us and the market very well in the last few years. We are predictable. So now moving on to growth for SwapClear. So SwapClear has grown a lot. And you might think that because it's very large, it probably doesn't have that much potential for growth, and you'd be wrong. It has a lot of potential for growth. And it has a lot of potential for growth for various reasons. One, because I think it's fair to say that it's a business which is almost immune to whether the environment is the low rate or a high-rate environment, right? So unlike the banks that, as you know, will be making more money when the rates are higher because of the NIMs, SwapClear is a business that sustains a certain amount of activity when there's volatility, whether the volatility is coming because it's -- the rates are going up or going down, it doesn't really matter. And I think that's something which is really important to understand for this business. And the level of volatility that we see now, we believe, is going to be sustained for a lot of different reasons, but -- and we can go into that, some of them being geopolitical and -- but we do believe that it's going to be sustained. The other reason why it's going to continue to grow is that there's some very clearly outlined element of regional developments related to SwapClear. So as I told you, I'm in New York. We are launching and we have launched FMX, the listed rates business that connects to FMX. And we're quite excited about that. That's an opportunity for growth for that business. There's an opportunity for growth, which has started to materialize on the Asian side with the deepening of financial markets in Asia. And you have some of the financial institutions that were clients that are becoming members. You have an overall growth of clearing in the region, partly pushed by, in some cases, a later implementation of some global regulations, but also by maturing of some of those markets. And it's across the region, definite potential for growth that we started to see. The other one is on the EU side. We'll take the question when it comes. I saw there was one around EMIR and the impact of EMIR. The reality for us is that we continue to see growth, very significant growth, including on the EU side to accompany the growth of Europe as a region. And we continue to capture that growth. And -- but I just wanted to point out on that graph because I haven't commented the graph, just the IM, which has grown very significantly over the last few years and which not only sort of exemplifies the growth, but it also creates more of even more of an anchor for the growth to attach itself to. On this slide, I wanted to start to talk about ForexClear, and I realize that we maybe have talked a little bit too much. So I'm going to try to go a bit fast. So ForexClear is, of course, much smaller than SwapClear. Huge potential for growth. It's delivering around double-digit growth every year now. And it's -- in terms of the potential, this is a gigantic asset class. And so the potential for clearing is quite significant in terms of TAM. It's not a business where we have real competition in the form of another clearinghouse. Our competitors are the prime brokers in FX, and it's convincing the marketplace of all the advantages of clearing. And so that, the more they clear in terms of the sort of sub-asset classes in FX, the more benefits they see from a margin efficiency standpoint. So the strategy in FX is very clear and very well outlined. We basically have to build liquidity first. So we call it, first of all, FX options activation, for example, which is one of those examples. It's all the members that we have that are connected for them to really clear as much as they can from an option perspective. The second one is to get as many banks as possible to onboard to the service, again, because they are the ones who are going to be the liquidity providers in the service across the various asset classes. Then it's to develop smart clearing and NDF Matching. And we're starting to onboard some significant names that you will see over the next couple of weeks on the Asian side to NDF Matching and to clearing, which is pretty exciting. Another thing that is on the road map for FX is to be part of the main session of CLS. Again, really significant. It means that much more efficient for the banks to connect than having to connect to 2 sessions. And then it will be to offer other CLS currencies like the Nordics. And in parallel to that, we are working on an offering of CNH deliverables. So -- and a solution on CNH deliverables, which won't go via CLS. You will go through Hong Kong. So I just gave you that as examples of a road map that we have for FX, which is extremely well defined and articulated and that we track very, very clearly with quite a few sets of KPIs related to each of those initiatives. It's growing a little bit as a hockey stick as you can see. It has grown at a compound rate of 16% over the last 6 years. And Asia is a very big engine of growth, of course. And there's more to come from there with the CNH deliverable initiative that we have and that we're working on. And as I mentioned before, we're working closely with CLS to make it easier for the market to clear by being part of 1 session as opposed to 2. So that's on the FX side. Strong growth, and it's an inflection point in terms of the sort of start of the hockey stick that you can see. If I move to RepoClear. RepoClear, the drivers are slightly different. I'm just going to take you away for a second from a sort of RWA driver. That's not the main driver for clearance -- or RepoClear. It's balance sheet efficiency. It's another clearance resource that the banks have to manage and that drives more into -- that drives more of that business than RepoClear than RWA. There's also a bit of RWA optimization, but it's mostly balance sheet optimization. It's a very big business for us. It's run across 2 entities, the French entity and the U.K. one. One clears euro-denominated repo and cash bonds, and the other one does the same in sterling. On the U.K. side, we clear about 70% to 80% of the interbank market, and we have no competition, which means that our competition is the uncleared. On the euro side, we clear north of 90% of the interbank market, and we provide deep liquidity for our members. And again, the balance sheet optimization is very key for our members. And as you can see, and that's what we were trying to demonstrate in the graph, one of the fundamental drivers of the growth of that business will continue to be the ever-expanding balance sheet of the governments across the globe and the fact that they continue to issue sovereign debt. So that one's top. But the next frontier, which is really attractive and exciting for us, is to incite the buy side into clearing. And as we speak, we are starting to onboard significant asset managers into the service as we really develop the buy side of that business. A quick word on CDSClear and equities. In CDS, we have made a huge progress on the European side and in the clearing of credit derivatives. We offer a wide range of product options. We have been so successful that we have pushed our competitor away, and the main competitor has retrenched to the U.S. So this is a business which is -- which has grabbed market share on the European side of it in a very, very significant way over the last few years to such a point that, again, and remember what I said before, what we do is not sort of self invented. We do it because we are working with the market for the market to define what we should do next. And the market has asked us to move now CDS clearing to the U.S. or to start CDS clearing in the U.S. in order to create that competitive pressure for the main incumbent that they want to see. So -- and again, coming from the market demand. In terms of EquityClear, I'm going to be very, very quick. You know it's been well advertised that the business that used to be an LCH SA has migrated to Euronext. I'm going to talk only about the one that remains, which is the one on the U.K. entity side. It's a business which has potential for growth, but it's a massively competitive business. And it's probably the most competitive space of all the businesses that we operate into. To give you an idea, in European equities, there's something like 22 CCPs that are playing a role. So they not all do the same as the other one. Some -- there are some verticals in there, but it's a very competitive space. And what we do is that we continue to work with our members to make sure that whatever we design, whatever we do next, whatever new efficiency we can think of or new underlying products, we do it with them, so that we continue to anchor them on our side. We're very committed to this business. We're not going anywhere. But it's not a space which is an easy space, I wanted to be very clear about that one. I'm going to stop there for Dan to say a couple of words on uncleared before we take the questions.

Thank you, Isabelle. I'll just get straight into things. So uncleared segment, let's talk about uncleared. We've talked a lot about clearing. I think Isabelle has covered that very well. I have no doubt, loads of questions. Why have you heard David and MAP talk around this in a few different presentations? It's simple, but it's really important. Number one, when you look at the scope of the marketplace across interest rates, across foreign exchange, across equity and across credit, you can see on the slide, a large proportion is not cleared. Now there are a variety of reasons why that may be the case. But the fundamental point is we are a business and we are a group of people with an expertise and a prominence in the derivatives and, for that matter, the security space. We take the view that we can solve quite a lot of the challenges and problems in this space, clearing being a solution for a part of it, but not necessarily for all of it. So when we talk about uncleared, just to make sure on the nomenclature, I mentioned bilateral area. Bilateral trade, 2 people trading together or uncleared, they are the same thing. When people trade in a bilateral way, those trades remain uncleared. Some bilateral trades will be -- or uncleared trades will be with collateral, some will be without. That's driven by some regulation called uncleared margin rules. So what you can see is there's still quite a portion that is not cleared on the interest rate side, but that's really predominantly moving into the, what I'd refer to, the nonlinear. So option products like swaptions, caps, collars, floors and perhaps cross currency swaps. Whereas in foreign exchange, a very, very big market in gross value and transactional flow, a large portion of that isn't cleared. And why is that? There are not clearing mandates around these things. A large proportion of the foreign exchange market, as Isabelle talked about, is in spot. So it's not really shaped for clearing, but there's definitely an opportunity in forward swap options and non-deliverable that we've been talking about. So quite a shift here, quite a lot to go at. And when we speak to our customers, it's a lot of their uncleared space that really is an opportunity for us. So maybe if we just move forward, and let me explain what we're trying to achieve and what we're trying to do and what we are doing in this. So I referred earlier to the G20 in September 2009, Pittsburgh, that summit. And at a headline level, without reading all the script, what they said was that they must collateralize your derivatives. Some of that was cleared. We've talked a lot about that, but some of that was uncleared. We've referred to earlier in the slides, the UMR, uncleared margin rules. So there's been a big focus to collateralize, which is meaning that some products like FX, options and non-deliverable forwards, as examples, they -- even if traded bilaterally and remain unclear, they actually attract margin. So perhaps clearing is the answer, but there are also a raft of products like forwards and swaps in FX, swaptions and cross currencies for that matter, that are not mandated to clear. So you don't have to post margin necessarily or in some you do. But the reality is, is that and they are consuming a lot of capital. So capital being different to margin. So there are regulatory pressures focusing on -- you're even going to get charged margin or you're going to get charged increased capital or in some examples, both. Then secondly, a lot of opportunity to really improve this. If you speak to people about what is their infrastructure and the architecture and choreography in the uncleared space, they'll generally tell you, it's very, very messy; many different pieces of the puzzle; really, really hard to be streamlined and straight through on this. If you think of what you get in cleared, you have this uniformity from trade through to settle, whereas in the uncleared, well, there's all these different pieces, bits and pieces as well. So this technology can help us do that, but we need to bring some order and centralized capability to that as well as unleashing some technologies. But very simply put, as an example, in the uncleared world, one of the banes of people life will be that they have disputes. They have a difference of opinion on valuation, difference of opinion on collateral. In clearing, we don't have that. We just -- the clearinghouse says the value is this, you pay margin. There are things we can apply from clearing to the uncleared space with the right partnership around that. So very quickly, lots of things putting pressure into the bilateral space. Out of that, we have Post Trade Solutions, which is basically working in that same business model closely with the customers through a deeper partnership to build solutions and resilience so that we can make that piece of the market much more efficient. Bottom line, you will never find someone who trades cleared rates or uncleared rates. You'll find someone who trades rates. They want solutions for the entire chain across their rates portfolio or FX or credit or equity. So that sort of neatly lines up here. If you think about the schema on that schematic on the right-hand side, the PTS infrastructure, on the LCH side in the sort of teal color, central rulebook, central rules, standards, standardized and transparent risk and initial margin calculations, variation margin, so on and so forth. So you have very clear prescribed uniformity in how those nonstandard trades become standardized through process. What we're looking to build on the left-hand side is a lot of the same. In your traditional bilateral, which I've referred to are uncleared, you'll have a myriad of different agreements and legal agreements and collateral agreements with each of your individual counterparties. If you bring it into a more centralized area, Post Trade Solutions, where we're having this what we call the clearinghouse for the uncleared world, we can have a centralized rulebook, a centralized collateral agreement, a centralized valuation and calculation, so disputes are a thing of the past, a centralized calculation of your risk and margin associated with that and so on and so forth. So what we're trying to -- what we are building and have built with some acquisitions as well is a centralized platform and centralized data and out of that centralized margin and collateral workflow. And out of that, we can apply a lot of our optimization techniques to make these products and assets that sit within our PTS infrastructure much more capital efficient and reducing that footprint that I referred to earlier in terms of financial resource optimization. So let's give a simple example around this. As I'm sure you can imagine, there are thousands and thousands of counterparties here. But just in a very simplistic way, purely through the lens of capital at this point, not margin, you could overlay margin, we developed a service called Smart Clearing. What is that? It's using the tools of Quantile, where we can basically harvest a bunch of bilateral portfolios and find optimization -- optimized subsets that we can put through our process and into a clearinghouse and reduce the capital consumption of those portfolios. So FX, not mandated for clearing, but there are some benefits, but you need to be very precise about what you bring in and what you leave out. So in this example, one bank has 3 positions, a bilateral position with bank A, positive 100; a bilateral position with bank B, minus 75; and a bilateral position with bank C, a positive 50. When you're calculating your capital consumption under SA-CCR, glossary of terms to come at the end of this to explain what that is, the gross risk will be 100 plus 75 plus 50, which is your 225 by counterparty currency path. That is then used as an input into your capital model. However, if you take those trades and submit them into clearing, as they're selected through the optimization process, the first thing we'll do is net those down, and therefore, the capital position will be 75. So already, you get a reduction by going from bilateral to cleared. But secondly, when you put it into a clearinghouse, the clearinghouse, as I referred to in some of my opening remarks, attract a different counterparty risk weighting relative to bilateral. Bilateral, depending on the standing of the counterparties between 20 and 40, CCP is generally at 2%. So what you're seeing there, the same print of trades kept bilateral and subject to bilateral counterparty risk versus putting them into a clearinghouse, getting the better benefit of netting from a capital standpoint and the CCP risk rating. You're reducing by 90%, 95% the capital footprint of those positions in your portfolio. It's a very simple example but hopefully illustrates to you the power of what we're building. And the point really is fundamentally, we'd like you to clear. But if clearing isn't the right answer or if actually, clearing attracts more margin and you want to target capital, we can do that between our cleared and our uncleared services. So really, think of the entire universe of products and services we have as an entire solution for Post Trade. To rattle through, we are doing a lot across the group as well. There is data coming from SwapClear from our credit business as well from CDSClear, which is going into our FRTB, Fundamental Review of the Trading Book product. So we've got connectivity there. Similarly, our regulatory reporting business. Historically, we knew it as UnaVista. It's utilizing data from our World-Check product, which sits within Risk Intelligence. And also we're providing trade data -- real-life trade data to enhance and really improve the benchmark pricing that we have in our fixed income products, the index products at FTSE. In cap markets, with my responsibilities now across markets as well, we've got connectivity between the trading platforms and the clearinghouses and bringing seamless execution into clearing between our NDF matching platform that we've launched and there's some optimization we're doing through FXall and Quantile as well. And then finally, a bit that we don't get a chance to talk about but I think it's really important, the relationships that we have in Post Trade are very senior within a lot of the major sell-side and buy-side firms. Because of the nature of the business, we're doing systemically important counterparty risk management. Isabelle and I, as an example, I think we're -- between us, across about 1/3, maybe 40% of the group's strategic accounts as exec sponsors, leaning into those relationships to make sure we can bring the overall firm and making sure we're bringing links to our data business, our index business and risk intelligence as well. So it's not just about the relationships we have in the context of Post Trade markets. But it's leveraging that elevated relationship we have to try and open doors for us to bring the broader group into those partnerships and become ever more important with those customers as well. And I come towards the end. So what are we super excited about? There's been a lot we talked about Post Trade Solutions you can hopefully see. We see that as a very big medium- and long-term and near-term opportunity. Asia, as a region, is really hot for us. We're spending a lot of time and investing a lot of money and making sure we have product tailored to the local markets as they develop and continue to grow as well. FMX, I'm sure there'll be some questions on this. But historically, this was futures. We're going to take over the swaps market. Well, frankly, the swaps market is alive and kicking. But actually, we think there's some real good offsets to do futures against the swaps portfolio. We've succeeded in taking a major share in the European side on the CDSClear. We're now expanding our network into the U.S. and we started to step into some of the digital asset clearing as well at back end of this year into next year. So constantly doing new things as well as expanding our existing is probably the key message to take away from here. And to finish, to wrap up, we've hopefully explained to you, in quite a quick pace, perhaps we can go quicker, how does clearing work, why is it critical. But I think, and I hope you can see, we've got some real strong foundations, real strong links and trust with our customers and a track record to prove it, that this has translated into growth. You can see that sustainable growth in the business organically as well as now embellishing in the last year or 2 with some strategic acquisitions that we brought in, but really continuing on that sort of organic journey across the entire derivatives and securities chain, not just limited these days to clearing but the other elements as well. And final, final, LSEG, a global business, multi-asset class; Post Trade, a global business, multi-asset class. Same customers and clients, different personas perhaps in some of those firms. But we are constantly partnering with our customers and we're looking to extend that model across the group, so we can have a ever more integral part of their business and bring value and bring success and growth to us as a group. So with that, I'll hit pause and hand back to Peregrine who I believe will moderate the Q&A. Peregrine?

Fantastic. Thank you both very much for that. We've got loads of questions, so let's see how many we can rattle through. Can I kick off with quite a broad one? It's anonymous. But can you talk a bit about the threats and challenges? Where might you face disruption either from new business models or new technology, for example?

Maybe I'll take that one now, Peregrine. I think we're constantly scanning the horizon for opportunities but similarly threats. We're not in any way complacent. I think there's a lot said about disruptive new technologies and new capabilities, and we're certainly not tone deaf to that. I'd just sort of answer that very quickly. On the one hand in clearinghouses, heavy-duty, high-resilience, high-regulatory scrutiny, not necessarily the hotbed for trying out new things. These need to be super battle tested kind of areas. But with the creation of our Post Trade Solutions, we are able to embrace and do newer things quicker, given they're less regulated. So I think there are -- certainly, if you're in the more settlement space, I think some of the newer technologies in DLT, blockchain, et cetera, are very interesting in that space. But I'd also say, look, we have AIs embedded in a lot of our optimization algorithms and Quantile. We are embracing these things. Perhaps, we could do a better job of being more public about them. But I'd say the biggest challenge we're facing right now is actually the pace of which we're delivering new product services, which are valued by customers, their ability to consume them. There is a challenge in terms of the Street's finite financial and human resources to able to onboard and take these products and services. So in some ways, I think that's probably where our biggest challenge is. Less so some of those maybe medium-term threats. But please be assured, we are keeping a close eye and looking where we can integrate these kind of elements into our offering as well.

Super. Thank you. And then we've had quite a lot in general on FMX, so I might just try and pull some of those together. One is a specific question around the regulatory status of LCH in the U.S. when it comes to clearing U.S. treasury futures and software futures. But perhaps more strategically, a question on the margin efficiencies that our participants gain, what the economic opportunity is for us, and how big of a strategic focus it is for us? Thank you.

Do you want me to take that?

Okay. Yes.

Okay. So first of all, from a regulatory perspective, we are fully registered with the CFTC, which is one of our main regulators. We've been registered since 2001, actually, as a clearinghouse -- derivatives clearing organization, DCO, right? So we are -- we have -- there's also an MOU between the CFTC and the Bank of England. So we have all the authorizations from a regulatory perspective to clear SOFR futures but also U.S. treasury futures. So just to be very clear about that. In terms of the margin efficiency, maybe I can quote a couple of figures that we've been working on with the team when we were working on the concept of FMX. So it's around up to 80% of margin efficiencies for U.S. dollar futures versus dollar swaps. And it's up to 50% for dollar futures versus [ 13 ] other currencies and not dollar swaps, right? So it's extremely efficient. And it's one of the reasons why there is the interest and the level of interest that we have seen from the investors into FMX.

Super. Thank you. I've got a question from Bruce Hamilton at Morgan Stanley. Can you remind us of the capital intensity of the business? How much capital does LCH have to hold? Or is the protection offered by margin, default fund, et cetera? Maybe just unpack a bit of what we went on in the slide, please, Daniel.

Yes, absolutely. Thanks for the question, Bruce. Look, I don't want to get too geeky in numbers in detail here, but the headline -- take LCH Limited as an example. We have 2 clearinghouses, Paris and London. Limited is the preeminent one in this context. But we hold, I think it's in our public accounts, around a net capital holding of about [ GBP ] 550 million. But to be very precise, only [ GBP ] 91 million of that, about roughly [ GBP ] 90 million is what we refer to as skin in the game, okay? The remainder of that is capital which is calculated through a formula to be compliant with the EMEA regulation through credit, market and operational risk, operational risk being about 75% of that, and then this sort of wind down in business capital that we have to hold. So when you look at the actual capital at risk rather than the traditional wind down operational capital, it's about [ GBP ] 90 million. And that's skin in the game. Just to be super clear, we refer to it as SITG, skin in the game. What is that? That is in the eventuality of a default, how much of our firm's capital is put at the front of the waterfall? Going back to the sort of waterfall I referred to, the first thing that we take in a default of any counterparty is we use the initial margin that they've posted and we've held. The second thing we will use is that default fund that they've posted and we hold. The third thing we will then use is our skin in the game or a portion of that. And then the fourth thing is the mutualized default fund and so on and so forth through that. To be super clear on that, that skin in the game is different by services, but that's the aggregate for LCH Limited. And just to be super, super clear, we have never ever used more than the initial margin of the defaulting firm themselves, never mind their default fund contribution, never mind our skin in the game. So we think this as very highly protected. We think of this as it's a relatively low-intensity element of that. But it drives the right behaviors to make sure we're holding our risk standards to the absolute, the gold highest of high standards. And quite frankly, our customers, our members who are also mutualizers in the worst-case scenario encourage us to do the same as well. So at the end of the day, as I've often said, nobody wants to buy the world's cheapest parachute. So we like to ensure we have the most resilient and robust risk management methods here. So that -- hopefully, that gives you a bit of an unpacking, Bruce. But any other questions, let me know.

And then I've got sort of 3 related questions from Russell Quelch at Redburn Atlantic. So in the uncleared market, is this white space? Or are there other people that we are displacing? What level of engagement have we seen so far in Post Trade Solutions? And what will our pricing model be or what is it?

Maybe I'll take those, if that's okay. So I think the uncleared market is, to a large extent, white space. Now it's not to say there are no providers there. But if we were to draw a picture of all the different firms or people that were involved in this space, it ends up becoming a very dark black piece of paper because there's so many relatively important but small elements around the whole piece. What we're offering and what we're bringing to the marketplace here is a single solution where we can do all those different elements for you. So we are looking at giving a -- I used an example earlier. Today, in the bilateral or uncleared space, there is a problem with dispute resolution. I say my valuation is this. You say it's this. We have a dispute. It ages. We hold capital against it. In our model, there are no disputes. So there are some businesses, for example, in that space making the dispute resolution process more efficient. What we're doing is removing the dispute resolution process. So our role and goal in this space is to either eliminate or materially rationalize a lot of these areas. So I think that's just one example, but there are many like that. So it's quite a busy space of interesting things. We think this is ripe for a sort of one solution around this. And some of it, we'll eliminate. Level of engagement, just to give clarity, what we've done is we've created a Post Trade sales force here. So we're not going into LCH Limited or XClear or YClear or ZClear. We have one team. These are the same customers at the end of the day and the same personas in those customers. So we've been integrating Quantile, Acadia, Post Trade Solutions into the overall sales offering. And we're already seeing really good cross-sell, up-sell, if for want of a better phrase, where the same customers are using us one product and looking to use us on another and another and another. So the engagement is really good. I will just stress, we are open access. We do also work with other providers in the space as well, so we're not in any way exclusive. But tying these things a little bit more closely together is certainly helping win in our dialogue with customers with some success. And then finally, the pricing model. I'd say we're in early stages around this because we've sort of been bringing these firms in, but there is a bit of a blend at this point. Some are more all-you-can-eat type things akin to SwapClear on the member side as we look to sort of gain traction with customers. And then some are more per diem, per ticket or per transaction or per message around it. So there's no simple answer to that question. Over time, we'll probably bring more alignment to that, but we see a lot of opportunity for us to grow the business in this space, and there's no shortage of interest. And I think there was another question in terms of client sort of size. Just to be clear as well, these are not new businesses with no customers. Quantile was connected, had customers. Acadian was connected, had 5,000 customers across multiple asset classes. So it's not starting from scratch. This is taking established businesses, integrating and putting one packaged offer to the customers.

Super. Question on SwapClear volumes from Andrew Coombs. What do you perceive to be the best rate environment for SwapClear volumes? One would assume higher rates in a steep curve, but you've seen volume growth across the last cycle.

Yes. I mean, for me, it's not dependent on the rate cycle. It's dependent on the underlying market volatility really. So it's relatively immune to whether rates are going up or down, but it's not immune in a good way to the way that rates are going up or down. So if there's a bit of uncertainty around the monetary policy like we saw, for example, going into the last Fed adjustment, then it creates a huge amount of flurry of activity in the market. And that heightens the volatility and more trades going into clearing. So I think that's more the way that I think about it than the link to whether rates are going up or down. And that's why we saw that the business has continued to grow really pretty much whatever the rates environment is. There's a question that I'll take as well, Peregrine, if you don't mind, which was the one around EMEA because I've seen it come up a couple of times, and it relates to SwapClear as well. So just to say that, first of all, the Level 1 text has been issued. We're waiting for Level 2. ESMA is working on it, so we don't quite know yet what the detailed implementation is going to look like. However, it's such a change compared to what we were looking at a few years ago. It's now not about migrating trades to the EU. It's about creating the -- a sort of fallback, an operational account, which could be used in the event of a problem with SwapClear. And there's very few trades that are going to have to go through the other CCP or one of the other CCPs. And the reality is that in all our calculations, and I can't share -- I don't think they are going to be happy if I were to share exactly the impact, but the impact is very small, extremely marginal for us.

Thank you very much. Just taking these in order. I think some of them can be quite quick. So Johannes at HSBC asking, settlement and custody is far more impacted by change to T+1 in the U.S. and potentially in the U.K. in some years. But what are the implications of T+1 for clearing?

De minimis is probably the short answer to that. I mean, really, that's really shortening the window on settlement. We're really pre-settlement on a lot of what we do. So frankly, de minimis is our view on the impact there.

And also, we're already done -- we're already at T+1 effectively on the security side of the market on the U.K. side, for example. We're already at T+1. We don't call it T+1, but the way that the market functions is T+1.

And then on pricing power, Ryan at [ Visualize ] is asking, can you discuss how you think about pricing power in the business, both frequency and magnitude? And how the minority member ownership may or may not limit your ability to raise price? I guess, we could throw in OTC [ DN ] in that as well.

Yes. Great question. I think we take a medium- to long-term view on everything we do. I've referred to Post Trade Solutions. Who are the main participants and players in that space? No surprise, it's the same main participants that we see in the cleared derivatives marketplace. So the business model, the way we operate, do we have pricing power? Yes, we do. Do we increase prices from time to time? Yes, we do. But the predominant growth of the business has been through working in conjunction with our partners, building product that delivers value, and pricing and charging for that fairly. And then again, the next thing and the next thing and the next thing. So whilst there's always a -- this question comes up time and time again. It's could you not put prices up? I think the impact of that could stymie a lot of our future growth and future opportunities as well. So we're not, again, not deaf and not dead to this. We do increase our prices steadily over time, but it's also with a mind on what are the next things we're building, who are the networks that we want to build, what are the participants there. So I think it's being sensible and cautious around how we do these things. The answer is not -- to not increase prices is the wrong answer. But also, to jack prices is the wrong answer. This is more about sensible and steady and demonstrating we're delivering value as we go, but also with a mind's eye on what are the next opportunities and who are the main participants. And it's generally the same big players on the buy and the sell side of the derivatives portfolio of securities.