London-based clearinghouse LCH.Clearnet looks set to take advantage of recent regulatory changes and move into the Australian market, taking on ASX Clear.
The Australian government recently moved to end ASX's monopoly by transferring supervisory responsibility for financial markets from the exchange operator to watchdog Asic. The first competitor on the scene is Chi-X, which was granted a license last month and hopes to be up and running in the fourth quarter.
Yesterday Chi-X inked a five year clearing and settlement arrangement with ASX, under which it will pay its rival A$275,000 annually to use its "trade acceptance service". However, Chi-X COO Peter Fowler stressed: "Importantly, the arrangement will not lock Chi-X into exclusively using ASX for the duration of this period."
According to the Australian newspaper, Chi-X had wanted to do a deal with LCH.Clearnet but its launch had not left enough time for the UK firm to set up down under.
However, LCH.Clearnet managing director Alberto Pravettoni has hinted that a move could be imminent, telling Thomson Reuters: "Australia is a very important market and we follow developments very closely."
The London clearing house's decision to look for business further afield comes as it faces growing competition in Europe. It is also attracting considerable takeover interest, recently confirming that it has received numerous approaches.
LCH.Clearnet looking to provide competition to ASX Clear - Reuters