BATS Europe, the multilateral trading facility (MTF) owned by Kansas-based market operator BATS Global Markets, will extend its interoperability initiative from 6 January next year to include its incumbent clearer EMCF.
BATS Europe launched a preferred interoperability service in July this year without the support of EMCF, which initially did not join because there was no guarantee central counterparties (CCPs) could access major European trade feeds.
The MTF was therefore forced to adapt its interoperability offering so that trading participants on both sides of a trade needed to nominate a preferred clearer – from LCH.Clearnet, SIX x-clear or EuroCCP – with EMCF acting as the default CCP if the brokers do not agree.
A month after the launch of BATS’ preferred service, EMCF announced it would support clearing choice from the start of next year. This will mean that from next year, BATS Europe’s members will no longer be required to maintain a relationship with EMCF for markets where they have chosen an alternative CCP.
Chi-X Europe, which is likely to be merged with BATS Europe next year, also plans to offer four-way interoperability from 6 January 2011.
The push towards interoperability in Europe has been largely led by MTFs, with London Stock Exchange-owned Turquoise, Burgundy and dark pool UBS MTF all planning to launch their own initiatives in the coming months.
Nasdaq OMX Nordic, which operates stock markets in Denmark, Finland and Sweden, will offer members the option of clearing with EMCF – in which it owns a 22% stake – EuroCCP and SIX X-clear – from April 2012.
The London Stock Exchange is regarded as the first European venue to offer clearing choice with the addition of SIX x-clear in September 2009.