18 February 2018
visit www.nextgenbanking.co.uk/

EuroCCP calls for 'Convention on Interoperability' for clearing counterparties

17 June 2009  |  5865 views  |  0 Hourly Markets

UK-registered clearing house EuroCCP has called for the adoption of a single standard 'Convention on Interoperability' that all central counterparties should sign, as the European clearing community struggles to implement a raft of bilateral agreements.

The Convention, designed as a framework agreement, would require CCPs to agree on risk management arrangements that are transparent to market users, platforms and regulators, says EuroCCP chief Diana Chan.

"While a number of Europe's CCPs, including EuroCCP, have announced plans to interoperate, the negotiations are bilateral. Four CCPs interoperating require six bilateral contracts. Six CCPs interoperating will require 15 contracts," she says. "By creating a Convention that incorporates common standards around key elements of risk management, change management, and dispute resolution, we believe CCPs can join together in greatly simplifying and expediting the achievement of interoperability, to the benefit of market participants throughout Europe."

Among the various interoperability plans announced by CCPs are: EuroCCP, EMCF and x-clear will have interoperability to serve Nasdaq OMX users; EuroCCP, LCH.Clearnet and x-clear will interoperate to serve Turquoise; and EMCF, LCH.Clearnet and x-clear plan to establish interoperability to serve Chi-X.

EuroCCP contends that the absence of a standard legal agreement on the implementation of risk management among interoperating CCPs could handicap meaningful competition.

An Interoperability Convention will ensure that risk is shared even-handedly and transparently between interoperating CCPs, rather than offloaded by one CCP onto another, says Chan.

"We owe it to our customers and to Europe's investors to find a faster solution to this issue. There must be complete transparency in how CCPs manage their exposure to each other, so that trading venues, market participants and regulators have the full picture and comfort that the risks are under control," she says.

EuroCCP believes the Convention should be developed in collaboration with other CCPs who have already agreed to interoperate.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

LCH.Clearnet agrees competitive clearing deals

LCH.Clearnet agrees competitive clearing deals

07 May 2009  |  13688 views  |  0 comments
SIX- x-clear and EMCF to offer competitive clearing

SIX- x-clear and EMCF to offer competitive clearing

03 February 2009  |  8506 views  |  0 comments
Nyse Euronext MTF to offer competitive clearing

Nyse Euronext MTF to offer competitive clearing

08 October 2008  |  8177 views  |  0 comments
EuroCCP moves to take advantage of Fortis woes; offers clearing for MTFs

EuroCCP moves to take advantage of Fortis woes; offers clearing for MTFs

29 September 2008  |  7037 views  |  0 comments
LSE pursues competitive clearing model

LSE pursues competitive clearing model

24 September 2008  |  9407 views  |  0 comments
Chi-X defends risk model for its CCP

Chi-X defends risk model for its CCP

18 September 2008  |  7543 views  |  0 comments
European clearing code failing to deliver

European clearing code failing to deliver

12 September 2008  |  6551 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.ebaday.comvisit www.swift.com/your-needs/instant-paymentsVisit https://www.capgemini.com

Who is commenting?

Top topics

Most viewed Most shared
Saudi central bank provides sandbox for banks to try out Ripple techSaudi central bank provides sandbox for ba...
10468 views comments | 16 tweets | 11 linkedin
Aussie real-time payments platform goes liveAussie real-time payments platform goes li...
8255 views comments | 15 tweets | 41 linkedin
ECB launches staunch defence of cashECB launches staunch defence of cash
7744 views 10 comments | 21 tweets | 26 linkedin
hands typing furiouslyHow can Blockchain Help with AML KYC
7614 views 3 | 9 tweets | 4 linkedin

Featured job

Competitive base + commission
London, UK

Find your next job