SIX x-clear and Dutch central counterparty EMCF have signed a Memorandum of Understanding to offer competitive clearing across multiple stock exchange venues.
The co-operation between SIX x-clear and EMCF is in line with access and interoperability guidelines for clearing agreed under the European Code of Conduct. Subject to regulatory approval the CCPs expect to implement the interoperable link in the summer of 2009.
The Code has so far been seen as something of a damp squib, with competitive clearing so far only available between x-clear and LCH.Clearnet on the London Stock Exchange.
Interoperability is considered key to reducing trading costs for market participants operating across borders, who currently have to fund cross margin arrangements across different CCPs.
Jan Booij, CEO of EMCF, comments: "Competitive clearing has long been a goal for EMCF, its participants and the platforms, Chi-X, Bats and Nasdaq OMX Europe. Interoperability with SIX x-clear will constitute a vital step in achieving this goal."
The link-up will also offer reassurance for market participants of an alternative avenue for central counterparty clearing in the event of a systemic default. The issue was brought to the fore recently when EMCF was taken into state control following the bail-out of parent bank Fortis during the financial crisis. Nasdaq OMX has since taken a 22% equity stake in the clearer.
The move to competitive clearing was applauded by Chi-X COO Hirander Misra: "We believe that the choice and competition offered through this horizontally integrated CCP model will result in lower prices, better service and further innovation."