The London Stock Exchange has signed a new clearing services agreement with the London Clearing House (LCH), rejecting an offer from Eurex Clearing, part of Deutsche Börse.
Under the deal LCH will reduce its clearing fees for trades on the LSE by 25%from January 2004. The contract will apply to both Sets cash equities and EDX equities derivatives businesses, as well as to any other new cleared services the LSE may introduce.
The new agreement will retain the existing notice period of twelve months, but also adds a three year exclusivity clause.
The LSE also voiced its support of the merger between LCH and Clearnet, the clearing house owned by Euronext and accepted the offer of a permanent seat on the LCH.Clearnet board.
Clara Furse, the Exchange's chief executive, says: "The LCH.Clearnet merger has changed the European clearing landscape into one of for-profit central counterparties. Negotiations over the summer and autumn, in which we created a new competitive tension between clearing providers, have been rewarding."
LCH shareholders will vote on the planned merger with Clearnet at an extraordinary meeting due to take place on Thursday.
David Hardy, chief executive of LCH and chief executive elect of LCH.Clearnet, says: "We remain fully on track to conclude the merger by the end of the year, and will now focus on ensuring the success of the merged company."