The Nasdaq OMX Group (Nasdaq:NDAQ) today announced the closing of its acquisition of a 22 percent stake in European Multilateral Clearing Facility N.V. (EMCF).
In October 2008, NASDAQ OMX agreed to purchase a stake in this leading European clearing house from Fortis Bank Nederland (Holding) N.V. with the objective of reinforcing EMCF's position as the leading clearing house in Europe. As a result of the transaction, NASDAQ OMX will have two representatives on the Supervisory Board of EMCF.
NASDAQ OMX has also signed an agreement with EMCF to use their services for Central Counterparty (CCP) for all Nordic transactions. The provision of CCP services is subject to regulatory approval. NASDAQ OMX's decision to introduce CCP services in the Nordic markets and its strategic investment in EMCF is part of a broader commitment to reduce clearing and settlement costs for its customers in Europe. In addition, through EMCF, NASDAQ OMX will allow transactions in the Nordic markets to be available for netting with transactions that are executed on MTFs and cleared through EMCF.
"Our investment in EMCF, and its commitment to provide cross netting between the Nordic markets and MTFs in London is a reflection of our drive to deliver clearing efficiencies to these markets," said Chris Concannon, Executive Vice President, NASDAQ OMX Transaction Services.
He continued, "This investment also reinforces our desire to support interoperability across Europe. It is a critical and needed structural change for the European markets, one that will increase competition and lower investor costs."
Jan Bart de Boer, Chairman of the Supervisory Board of EMCF, said, "We are delighted with NASDAQ OMX as a partner in EMCF. We share the same vision on post-trading. EMCF has proven that in post-trading it is competition, not consolidation, that delivers better and cheaper services."
Cross netting of trades provides significant cost savings to investors by eliminating the need to pay a clearing fee on both the opening and the closing of a transaction. Interoperability between clearing houses allows markets to interact with multiple clearing houses to clear and settle their trades, increasing competition and lowering costs for investors.
"NASDAQ OMX is taking the lead in implementing central counterparty clearing in the Nordics and we are leveraging that initiative to support clearing efficiencies in Europe," said Hans-Ole Jochumsen, Executive Vice President, NASDAQ OMX Transaction Services Nordic. "It is now time to turn the focus towards the post-trading part of the transaction, clearing and settlement, where there are great efficiencies to gain."