Nyse Euronext has postponed plans to terminate its clearing contract with LCH.Clearnet, leaving the door open to a longer-term agreement as consolidation trends grip the industry.
The pan-European exchange operator has agreed a one-year extension to its UK and European clearing deal with LCH.Clearnet, postponing plans to build and operate an inhouse clearing system by November 2012.
Nyse Euronext last month confirmed that it is one of a number of potential suitors for the London clearer. The Big Board has teamed up with financial data house Markit and entered discussions with LCH.Clearnet over a possible take-over. The clearer is also being pursued by Nasdaq OMX and is considering its options.
Welcoming the extension of its contractual deal with Nyse Euronext, Ian Axe LCH.Clearnet chief Ian Axe hinted at longer-term prospects for co-operation. "We look forward to continuing to support Nyse Euronext, as we have for many years, and to providing them with our world class service," he says. "In parallel, we are working with them on a longer term plan regarding cash equities' clearing arrangements."
Duncan Niederauer, Nyse Euronext chief, says the contract extension will give both parties more stability at a time of major M&A upheavals in the exchange trading business: "In the current dynamic environment, where we are finalising our planned business combination with Deutsche Boerse and LCH.Clearnet Group is considering its own strategic options, this extension gives both parties the time needed for these strategies to crystallise, while providing operational stability and continued service to our customers in the meantime."