UBS is set to become the first London Stock Exchange client to switch its clearing from incumbent provider LCH.Clearnet to Switzerland's X-Clear, under a new competitive clearing regime introduced by the LSE in September.
UBS is the largest single provider of liquidity on the LSE. The loss of its business will be a blow to LCH.Clearnet and its prospective merger partner the Depository Trust and Clearing Corporation, which enjoys a virtual monopoly on clearing on its home turf in the US.
Robert Barnes, managing director, equities at UBS, told the Securities Industry and Financial Markets Association conference in London that the bank will start using X-Clear from 12 December.
The move will be welcomed by the European Commission, which has been pushing the industry to adopt a voluntary code of practice aimed at improving cross-border competition between Europe's domestic depositories and reducing costs.
UBS drops LCH.Clearnet in favour of X-Clear - FT