24 April 2014

Nasdaq OMX suspends plans for competitive clearing

26 March 2012  |  6096 views  |  0 ticker 1

Nasdaq OMX has postponed plans to introduce interoperable clearing in the Nordic cash equity markets in April, citing regulatory uncertainties.

The exchange was set to join the UBS MTF, Turquoise, Burgundy and Chi-X and Bats in introducing competitive clearing from next month.

Traders and operators have spent years lobbying for clearing interoperability as a way to reduce post-trade costs. Agreement on a common code of conduct for interoperability was reached in 2006, but progress has been slowed by a succession of competitive constraints, regulatory and risk issues.

In suspending its plans, Nasdaq OMX says it will await the outcome of a host of regulatory reforms set to be introduced over the coming year, including the drafting of technical standards by the European Securities and Markets Authority in cooperation with the European System of Central Banks. These arre not set to be finalised until the end of the year.

Hans-Ole Jochumsen, president of Nasdaq OMX Nordic says the exchange has been working on its competitive clearing model since 2009.

"We are convinced that it will act to drive liquidity and lower investor costs, thus benefiting our clients and the European capital market as a whole," he says. "However, there is still uncertainty regarding the detailed requirements for interoperability even though there is a political agreement regarding Emir (the European Markets Infrastructure Regulation). There needs to be clarity and a level playing field in this area, before we can introduce interoperability."

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