LONDON, 1 December 2025 – The FIA-sponsored European Agent Trustee Model (EATM) has gone live at LCH Ltd for its SwapClear service, marking an important milestone in a multi-year project between FIA, a consortium of bank clearing members, two European clearinghouses, and external counsel.
The EATM is a new client clearing model designed to broadly replicate the futures commission merchant (FCM) clearing model in the US, with the aim of increasing the clearing capacity of globally systemically important bank (G-SIB) clearing members. It is intended to co-exist with, rather than be a substitute for, other clearing models available in Europe.
Five years in the making, the EATM has been created by FIA in collaboration with Bank of America, Barclays, Citi, Goldman Sachs and J.P. Morgan, as well as LCH Ltd, Eurex Clearing and Linklaters. It was initially designed for use with over-the-counter derivatives, but could be extended to exchange-traded contracts, subject to demand.
The EATM has been developed under English law, with an equivalent structure currently being developed under German law.
Under the EATM (English law), clearing members may enter trades with a CCP on behalf of their clients and hold those trades on trust for those clients. This differs from Europe’s predominant ‘principal model’ in which clearing members act as financial intermediaries between their clients and the CCP.
This means that under the EATM, a clearing member is party to one transaction – the client transaction with the CCP, whereas under the principal model, it is party to two transactions – one with the CCP and one with the client.
The aim of the EATM is to bolster capacity, particularly among G-SIB clearing members, which face additional capital charges when they clear OTC derivatives for their clients under the principal model.
“By effectively removing the double-counting, the EATM will help increase the capacity of clearing members offering client clearing in Europe through cost savings and efficiencies,” said Walt Lukken, FIA President and CEO. “The EATM provides welcome capacity for clearing services at a time of unprecedented growth in our markets.”
The EATM replicates many features of the US FCM clearing model and was made possible by significant developments and improvements in the understanding of the legal underpinnings of the US version.
“It has historically been difficult to design a clearing model outside the US that substantially replicates the US FCM clearing model, due to some uncertainty about the legal basis of that model,” said Mitja Siraj, FIA’s Vice President of Legal, Europe.
“Recent legal memoranda prepared for FIA and ISDA by external counsel have provided more clarity and enabled the articulation of the legal relationships underlying the US FCM clearing model. This has made it easier to reverse engineer that model. What has been a statutory construct unique to the US legal system has now been replicated through different arrangements that are referred to as agent-trustee structures outside the US.”
Today’s launch by LCH Ltd’s SwapClear marks the go-live of the EATM (English law) model. This means that UK-based clearing members of SwapClear can offer the EATM to their clients, irrespective of their clients’ location.
Eurex Clearing is in the process of implementing the same model and will inform market participants once it has been completed. Both CCPs also intend to implement the EATM in due course for Germany-based clearing members.
While LCH Ltd and Eurex Clearing have been involved in the project from the start, the EATM is designed to be CCP-neutral and can be offered by any European CCP. It has also been designed to ensure there is minimal disruption to existing CCP operations, processes and rules.
“LCH Ltd’s SwapClear service is delighted to work with FIA in support of our clearing members and the wider cleared swaps community as the first CCP to offer this model,” said Nick Rustad, Global Head of SwapClear & Listed Rates.
“Today’s launch of the new EATM model reflects a long-term coordinated effort among the FIA, consortium members, and CCPs to create future OTC clearing capacity in EMEA. The EATM model combines access to European segregation models and rulesets with the capital efficiency of the US agency model, offering our clients further optionality,” said Helen Gordon, Global Head Derivatives Clearing Product, J.P. Morgan.
“The new EATM model is a key development in Europe to add capacity in client clearing. Barclays is pleased to have an alternative to manage a large and growing notional footprint. We know this is important for our clients and we strive to remain at the forefront of industry initiatives,” said Gary Saunders, Global Head of Liquid Financing Platform Services at Barclays.
"We are delighted to have helped the industry bring such a complex project to a successful conclusion," said Michael Voisin and Sarah Willis, who co-led the Linklaters team. "We began working on the legal analysis which underlies the EATM over 10 years ago and, over the last five years, have built on our initial feasibility study to design and implement the model.”
An FAQ with further details on the EATM client clearing model in Europe is available here.
FIA has published EATM-related documentation here.
For more information about the EATM, please contact: eatm@fia.org.
For media inquiries, please contact FIA’s communications team – fiapr@fia.org
