Deutsche Börse is to launch a new central counterparty service (CCP) for equities trading next month.
The CCP function will be performed by Eurex Clearing, which already operates a central counterparty on derivatives exchange Eurex, Eurex Bonds and Eurex Euro-Repo.
The equities version of the system is slated for launch on 27 March and will cover trading on the screen-based Xetra market and on the floor of the Frankfurt Stock Exchange. About 100 of the 400 or so German stock market participants will participate as direct clearers in the system. Of these, 29 general clearing members will provide third party services for non-clearers.
The CCP stands between buyers and sellers in the marketplace, preserving the anonymity of participants and providing related risk management and netting services.
At Deutsche Börse, gross delivery management, which is available to market participants in their role as a clearing and settlement bank, is a central component of the first CCP release. It offers the opportunity to show clients the individual transactions in the netting process on a gross basis at the same time and manage them.
The new CCP service will initially support transactions in some 1000 German equities in collective safe-custody and tradable on Xetra. Plans call for an expansion of the CCP functional capacity and the number of securities in further releases.