Chi-X Europe plans clearing interoperability

Chi-X Europe plans clearing interoperability

Chi-X Europe has become the continent's first trading platform to offer its customers the choice of four different clearing providers.

The exchange will offer four-way interoperability with EMCF, EuroCCP, LCH.Clearnet and SIX x-clear for all traded equities, with the exception of the Spanish market, by 1 January.

Traders and operators have spent years lobbying for clearing interoperability as a way to reduce post-trade costs. Agreement was reached within the industry some time ago but progress has been stymied over the last couple of years by regulators' concerns about the associated systemic risks.

This year has seen a breakthrough though, with the FSA recently giving the green light to an arrangement between LCH.Clearnet and Switzerland's X-Clear.

Last month Bats Europe - which is in the middle of a proposed takeover of Chi-X Europe - introduced 'preferred' interoperability, keeping EMCF as the default clearer but letting traders choose between EuroCCP, LCH.Clearnet and SIX x-clear.

The Chi-X agreement takes things a step further, offering genuine interoperability and marking the first time EMCF has entered the fray. The clearer also told Bats and Nasdaq OMX it intends to enter interoperability agreements.

Alasdair Haynes, CEO, Chi-X Europe, says: "We believe competition and choice will drive down clearing costs and make the European market an even more attractive place to trade. We would strongly encourage all other European exchanges and MTFs to join this initiative by supplying trade feeds which will be of further benefit to the whole market."

Jan Booij, CEO, EMCF, adds: "The time is now to take the next step in opening up the European clearing landscape. Interoperability will make European markets more efficient and it is a tool to open up the clearing and settlement silos in Europe."

UBS has also moved towards offering traders a choice, with its MTF currently live with EuroCCP and SIX x-clear, and EMCF and LCH Clearnet slated to be added subject to regulatory approval.

Robert Barnes, CEO, UBS MTF, says: "We hope other markets will follow this best practice example for enhancing efficiency in the European securities markets."


Bats says it will now also offer four-way interoperability from 1 January, adding EMCF. Mark Hemsley, CEO, Bats Europe, says: "Industry feedback has been overwhelmingly positive since we launched interoperable clearing at the end of July and we are delighted to see the end goal of full multilateral interoperability become a reality."

Comments: (1)

Gary Wright
Gary Wright 17 August, 2011, 16:32Be the first to give this comment the thumbs up 0 likes

Really major moves at last and i now expect all MTFs and Stock Exchanges to follow

Interoperability should have a very positive impact on price and i hope that is passed back to the investor as soon as it is created.

Now the risk impacts that i feel are still within reach to bring down but will need further attention. Collateral management and margining next and look out for next years Post Trade Forum debate