US post-trade processing firm Depository Trust and Clearing Corporation's (DTCC) member-owned structure could complicate its battle to acquire European clearing house LCH.Clearnet.
The DTCC revealed its bid for LCH.Clearnet last October, but earlier this month a consortium of brokers, including inter-dealer broker ICAP, signalled its intention to launch a counter-offer. Many of the firms reportedly involved in the consortium either have significant US subsidiaries that are member-owners of DTCC, or, in the case of US institutions, are members themselves.
In challenging the DTCC for possession of LCH.Clearnet, consortium members are effectively competing with an organisation in which they collectively own a substantial stake.
“We don’t want get into a bidding situation where a firm is bidding against a branch of the same firm,” said a source familiar with the situation.
The brokers reported to be involved in the consortium with ICAP are BNP Paribas, Citi, Deutsche Bank, HSBC, J.P. Morgan, Royal Bank of Scotland, Société Générale and UBS. ICAP is the only firm that has publicly confirmed its participation.
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