Nyse Euronext MTF to offer competitive clearing

Nyse Euronext MTF to offer competitive clearing

Transatlantic exchange Nyse Euronext has selected EuroCCP to provide clearing and settlement services for its new European multilateral trading facility (MTF) when it launches in November, but it will open up the platform to competing clearing houses next year.

Nyse Euronext says DTCC-subsidiary EuroCCP will act as a central counterparty (CCP) and provide post-trade services when its MTF - dubbed Octopus - launches in November.

But the exchange will offer access to other pan-European clearing providers after the MTF has gone live. These include Anglo-French group LCh.Clearnet, Swiss provider SIS x-Clear and European Multilateral Clearing Facility (EMCF) - the Fortis Bank subsidiary that is now owned by the Dutch government.

"The four clearing houses will work to establish links amongst themselves so that Nyse Euronext can offer customers of its new MTF a choice of central counterparty in 2009," says the US-based exchange.

Cees Vermaas, executive director, European sales who is leading the new pan-European MTF project at Nyse Euronext, says the move is in line with the EU Commission's voluntary code of conduct, which requires that market infrastructures offer reciprocal open access.

Vermaas says Nyse Euronext is "the first exchange to offer freedom of clearing choice to our customers who will be trading on our new pan-European MTF".

"We believe all four clearing and settlement providers will work to implement links to each other to be ready to clear the full range of stocks from 14 European countries in the course of 2009," adds Vermaas. "This will considerably enhance competition, delivering quality of service, reducing cost and lowering risk for our customers."

The Octopus MTF - which is based on Nyse Euronext's Arca trading technology - will begin with a phased introduction of between 400-500 pan-European blue chips. The system is designed to attract algorithmic traders, using a central limit order book and offer "ultra-low latency in microseconds".

As well as going up against domestic exchanges, the Octopus platform will competing against other MTFs that have launched in the European market such as Chi-X and Turquoise and most recently Nasdaq OMX Europe. Trading began on Nasdaq OMX's MiFID-compliant pan-European trading and routing facility in September.

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