BNP Paribas Securities Services (BNP Paribas) today announced that it will offer an integrated post-trade service to banks, brokers and other financial intermediaries wishing to trade stocks under the proposed cross-trade agreement between the London Stock Exchange (LSE) and the Singapore Exchange (SGX).
The agreement between the two exchanges is designed to boost liquidity and increase access for investors. The first phase will see LSE members start to trade shares on the newly created International Board in the top 37 companies listed on the SGX this year, before SGX members begin trading blue-chip, FTSE 100 stocks in the first half of 2013.
LCH.Clearnet Ltd, the international clearing house, will provide clearing services for the proposed cross-trade agreement. Through its memberships of LCH.Clearnet Ltd as a general clearer and of central securities depositories in the UK and Singapore, BNP Paribas will offer brokers the ability to clear, settle and safe-keep Singaporean stocks traded on the International Board, and FTSE 100 stocks traded on SGX.
This will benefit Singapore-based brokers that are unlikely to hold memberships of any UK-based clearing house by enabling them to clear locally without having to invest in new memberships or additional technology.
The cross-trade agreement reflects increasing impetus from major exchange-groups to partner with other exchanges in leading economies, and BNP Paribas believes it can help exchanges' global expansion.
"We are a local custodian in 25 markets clearing 2 million executions daily as a member of 11 clearing houses globally," said Philippe Ruault, global head of Clearing and Settlement at BNP Paribas Securities Services. "We have a long track-record of simplifying complexity in the post trade environment. This puts us in a strong position to help clients with their post-trade requirements, and to help exchanges with their international growth ambitions. We look forward to supporting the LSE and SGX in future initiatives."
Nicolas Bertrand, head of Equity and Derivatives Markets at London Stock Exchange said: "This first-of-its-kind partnership with Singapore Exchange will offer our customers new, previously inaccessible opportunities and raise the profile of our listed companies. The support of global custodians such as BNP Paribas is a clear endorsement of the International Board and the potential it offers investors in Singapore and London."
Nels Friets, head of Securities at Singapore Exchange said: "We welcome market interest in this initiative. We look forward to working with BNP Paribas and other members to offer customers in Singapore and London a platform for investing in each other's markets."
BNP Paribas is a general clearing member for all major European, Asian and US exchanges, as well as multi-lateral trading facilities. It expects to become a member of SGX for third party clearing in due course.