CCP deal brings European clearing competition closer

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.”

Smart Trade liquidity management tool adopts CEP

Smart Trade Technologies has agreed a deal to integrate EsperTech’s complex event processing (CEP) capabilities into its smartTrade liquidity management system (LMS).

The smartTrade LMS is used by buy- and sell-side firms to manage liquidity for best execution, smart routing of orders across multiple asset classes and geographies, and tighter control of order flow for risk management purposes. The system comprises four elements: LiquidityAggregator; LiquidityCrosser; LiquidityOrchestrator, a smart-order router; and LiquidityConnect, which link to multiple execution venues.

EsperTech uses an open-source Java CEP engine that detects and correlates complex situations in real time when user-defined conditions occur among large volume event streams. CEP is used by financial market participants to identify and exploit trading patterns using streams of market data.

Stena acquires stake in Italian WEEE recycler

A subsidiary of the Swedish recycling group Stena Metall has become the main shareholder of the Italian e-scrap management specialist S.i.a.t. (Societa Italiana Ambiente e Territorio) based near Brescia. "It is a strategic decision to strengthen our presence in Southern Europe. It also means that the collaboration with the European Recycling Platform is deepened", commented Phär Oscár, managing director of Stena Metall's WEEE (waste electrical and electronic equipment) division Stena Technoworld. The company did not disclose financial details of the transaction, which also involves three Italian local authority-owned utility and environmental services companies.

Tires Recycled into Construction Blocks

A company called PMGI/Productive Recycling recently announced that it had devised a new method of disposing of discarded tires from the automotive industry. Roughly 300 million used tires are generated in the United States alone every year, and they amount to one of the most hard to solve problems the country is faced with it, from an environmental standpoint. Most of these tires reach the landfills, where they take up precious space, and also house different pests. In addition, they pose a very high fire hazard and release dangerous chemicals, including carbon dioxide, if they are burnt.

The managing Director of the company, Gerald Harrington, says "Scrap tires are not only a waste of valuable landfill space but a more serious waste of what is now a viable resource. To illustrate the magnitude of the used tire problem the governments, Solid Waste Management, reports indicate, there is one scrap tire produced for every three people in the United States.

EU Commission, industry clash over electronic waste collection

European Commission and business representatives squabbled over whether to make manufacturers pay for collecting consumers' waste yesterday (29 January), during a debate on the proposed review of an EU directive on recycling waste electrical and electronic equipment (WEEE).

In one of the first public debates on the Commission's proposal to recast the WEEE Directive, business and Commission representatives clashed over the way to revise rules for old electronic products.
In the wake of the EU executive's proposal, published in December, electronic equipment manufacturers have already expressed concern that the review will result in added costs for business without no real trade-offs.

Meanwhile, the Commission refers to the review as "an opportunity for EU companies to innovate and have access to valuable raw materials" and underlines its intention to cut red tape and reduce related costs for industry.

Israeli company turns old rubber back into... rubber

Ever since Charles Goodyear invented a novel way to vulcanize rubber making it strong and stable for tires, scientists the world over have been searching for ways to reverse the process. Millions of tons of old tires and rubber waste collect in landfills -- their chemicals leaching into our groundwater. When tires burn, pollutants fire into the sky.

While some companies have discovered ways to turn vulcanized rubber into something else -- such as fuel -- an Israeli company, Levgum, believes it has developed the best solution yet: turning the rubber back into its principle components, for reuse.

"We can deal with any rubber waste: tires, old conveyer belts, rubber from mattresses, solid tiles, anything," Ran Zamir, Levgum's CEO, tells ISRAEL21c. Basically, he adds, the company can handle any rubber waste that has been sulphur cured -- curing being the process used to stabilize the rubber, and "invented by Mr. Goodyear," says Zamir.

EMCF “ready to service LSE flow”

European Multilateral Clearing Facility (EMCF), the Dutch-regulated central counterparty that clears trades for three UK-regulated MTFs, has been granted recognised overseas clearing house (ROCH) status by the UK’s regulator, the Financial Services Authority. This will allow EMCF to act as a clearinghouse for regulated markets in the UK, including the London Stock Exchange (LSE), and enable it to cater for its existing MTF users should they wish to become full exchanges.

EMCF, which is regulated by the Netherlands Authority for the Financial Markets (AFM) and Dutch central bank De Nederlandsche Bank (DNB), previously cleared for multilateral trading facilities (MTF) Chi-X, BATS Europe and Nasdaq OMX Europe under foreign exempt status. There is no regulatory requirement for EMCF to have ROCH status to clear for the MTFs, but because of the alternative venues’ growing market share, the FSA had become increasingly keen for EMCF to become an ROCH, according to Jan Bart de Boer, chairman of the clearing house’s supervisory board.

In theory, EMCF could now offer clearing services to the London Stock Exchange. “From a regulatory perspective, EMCF is now ready to service LSE flow,” said de Boer. “EMCF would now be able to do a deal with LCH.Clearnet [The LSE’s clearing house] and the LSE. The question is whether LCH and the LSE are willing to do a deal.”