Morgan Stanley increases Clearing Corp stake

Morgan Stanley increases Clearing Corp stake

US investment bank Morgan Stanley has increased its stake in the Chicago-based Clearing Corporation from one to seven per cent after it paid $4.4 million for shares in the clearing unit that were formerly held by Refco.

According to press reports, the bank was the winning bidder in an auction for Clearing Corp shares that were owned by Refco, the futures and securities broker that was forced into bankruptcy by a fraud scandal in 2005.

Morgan Stanley is the third firm to make an investment in the clearing business in the past month. In December interdealer brokers Icap and GFI Group took equal undisclosed minority stakes in the company.

The Clearing Corporation has been looking to widen its customer base since the Chicago Board of Trade (Cbot) switched its clearing operations from the firm to the neighbouring Chicago Mercantile Exchange (CME). Cbot switched providers after the Clearing Corporation agreed to provide clearing services to the Swiss-German exchange Eurex US.

Other investors to have taken a stake in Clearing Corporation include Goldman Sachs, Merrill Lynch and Eurex.

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