Europe’s biggest brokers welcomed last week’s announcements on interoperability between central counterparties (CCP) but admit it is only the first step towards an efficient clearing model for the pan-European market.
EMCF, which acts as the CCP for multilateral trading facilities (MTF) Chi-X, Nasdaq OMX Europe and BATS Europe, entered into a deal last week with Swiss clearer SIX x-clear to interoperate for those venues that choose to implement it.
So far, all MTFs that use EMCF have announced their intentions to add SIX x-clear as an alternative clearer. Turquoise, a broker-backed MTF, also told theTRADEnews.com that it is in discussions with its clearer, EuroCCP, to extend clearing options available to members.
However, the London Stock Exchange (LSE), which added SIX x-clear to LCH.Clearnet, its incumbent clearing house, last December and NYSE Euronext, which uses LCH.Clearnet across its European markets, said they have no plans to add to their current CCP offerings, in light of last week’s announcement. With SIX x-clear and EMCF agreeing interoperability, and SIX x-clear sharing CCP duties at the LSE, the day on which brokers can use a single CCP for accessing multiple major European exchanges and MTFs may have moved one step closer.
“The deal between EMCF and SIX x-clear is definitely a step in the right direction,” commented George Andreadis, head of AES liquidity strategy, Credit Suisse. “However, interoperability between clearing houses will become more valuable once the CCPs that account for the majority of market share follow suit.”
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