The London Clearing House (LCH), x-clear, the Swiss central counterparty (CCP), and exchange operator virt-x have set March 2003 as the launch date for the first pan-European CCP structure.
The planned structure will support two interlinked CCPs provided by LCH and x-clear, allowing virt-x members a choice of service. Both CCPs will clear the full range of stocks traded on virt-x - the pan-European cross border exchange.
CCP aims to eliminate counterparty risk for members on market trades, through the efficient measurement of risk and collateralisation via margin cover, default funds and external insurance to protect itself and the market from member default.
Antoinette Hunziker-Ebneter, virt-x’s CEO, says: "The launch of a pan-European CCP structure in March 2003 will complete virt-x’s integrated trading, clearing and settlement model...This integrated straight-through processing environment will further simplify the process of trading securities cross border and deliver real operational, risk and cost benefits to members."
David Hardy, LCH chief executive, adds: "This is the second central counterparty service to be launched by LCH EquityClear, and further highlights the demand for a value adding CCP model for equities, that delivers anonymity, reduces operational risks and costs, provides greater security and, through netting, minimises the number and value of settlements."