Nasdaq OMX has partnered with
trading technology vendor SunGard to support connectivity and post-trade
workflows for members of the exchange operator’s soon-to-be launched NLX European
NLX, which will initially
offer trading in euro- and sterling-denominated short- and long-term interest
rate derivatives following its planned Q1 2013 launch, will incorporate
SunGard’s Stream Derivatives suite of solutions.
The tools include Stream
Clearvision, which will support connectivity, allocations, give-ups, take-ups
and split management, as well as Stream GMI and Stream Ubix, SunGard’s
solutions for trade load and position keeping, valuation and reconciliations.
“Partnering with solutions
providers that are readily accessible and familiar to our members is a key part
of the NLX offering,” said NLX CEO Charlotte Crosswell. “SunGard’s post-trade
solutions for derivatives provide a reliable, efficient and accurate means of
managing the processing of NLX listed interest rate derivatives.”
Clearing of NLX trades will be
conducted via Anglo-French central counterparty
LCH.Clearnet’s Synapse derivatives clearing platform. LCH will clear NLX
products using a value-at-risk based methodology, rather than the SPAN approach
traditionally used by derivatives exchanges.
The venue aims
to attract market share by offering users collateral efficiencies through the
ability to cross-margin their short- and long-term exposures. The exchange will
not charge membership or market data fees. Initial liquidity is expected to be
provided both by electronic market makers and large sell-side firms looking to
facilitate institutional client business.
On launch, NLX
will compete primarily with Deutsche Börse owned Eurex and NYSE Euronext’s
Liffe, which currently account for over 90% of listed derivatives trading in
Europe. But it will also attempt to capitalise on regulatory change –
specifically the European market infrastructure regulation and MiFID II – that
will lead to the trading of OTC derivatives on exchange-like, centrally-cleared
week, Nasdaq OMX unveiled a global index initiative with the rollout of 4,000
US dollar-denominated indices.