Turquoise hit by clearing issue in Italy - report

Turquoise hit by clearing issue in Italy - report

Bank-backed pan-European platform Turquoise will not offer trading in Italian equities when it launches because Italian central securities depository Monte Titoli will not cooperate with its own clearing and settlement provider, EuroCCP.

According to a Financial Times report, Turquoise chief executive Eli Lederman said in a note to members that Monte Titoli - which is the the settlement provider for Borsa Italiana and part of the London Stock Exchange Group (LSE) - has indicated that it "will not allocate resources" to cooperate with Euro CCP.

In the note, which has been seen by the FT, Lederman says Monte Titoli is the only facility where securities can settle for a central counterparty as required by Italian regulations, so the decision "creates a barrier to the market" and leaves no alternative except to wait for Monte Titoli to allow Euro CCP access.

Lederman said the position taken by Monte Titoli will also affect other clearing providers, so other MTFs in Europe will face similar problems.

The LSE has refuted claims that Monte Titoli has not "allocated resources" to working with Euro CCP. The UK exchange told FT reporters that the issue is "purely technical" and concerns "the ability to test safely and securely on the new platform".

According to the FT report, Monte Titoli's inability to work with Euro CCP is due to the migration of Italian equities to the LSE's TradElect trading system, which is due to be completed in September.

Turquoise will start trading in a limited number of European equities next month ahead of its planned launch in September.

Earlier this month Turquoise was forced to back down on plans to its market 15-minutes earlier than incumbent exchanges after Deutsche Börse and the LSE threatened to open earlier if it went ahead with the move.

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