Nordic multilateral trading facility (MTF) Burgundy has launched interoperable clearing, giving members the choice of whether they want to clear their trades with EMCF or SIX x-clear.
The introduction of clearing choice is intended to help users save capital and reduce their clearing costs by consolidating their flow to their preferred clearing house. Burgundy offers trading in 1,200 securities in Denmark, Finland, Norway and Sweden.
“This is an important strategic milestone for our clients as we are the first Nordic exchange that offers choice in the increasingly important clearing landscape,” said Olof Neiglick, CEO at Burgundy. “Deregulation and competition are the main drivers behind service improvements and price cuts in any market – this is also the case for Nordic securities trading as the industry matures.”
Burgundy follows fellow MTFs Turquoise, BATS Chi-X Europe, and UBS MTF in offering members a choice of clearers.
Domestic exchanges have so far been slower that MTFs in revealing their plans for interoperability. Nasdaq OMX Nordic, which runs domestic exchanges in Denmark, Sweden and Finland, announced it was delaying its interoperability offering scheduled for April, citing regulatory uncertainty.
Germany’s Deutsche Börse has taken some steps to offer clearing choice, after revealing earlier this week that its analysis of interoperability found potential benefits and risks for the exchange and for investors at the Frankfurt Stock Exchange.
The exchange’s investigation concluded that interoperability may have potential positive effects for the exchange as well as for the member community, provided the respective central counterparties (CCPs) have adequate risk standards in place – but also noted that certain member groups may face increased cost from additional collateral requirements.
“With this analysis Frankfurt Stock Exchange confirms its openness towards connecting additional CCPs besides Eurex Clearing,” stated the exchange. “CCPs will be treated on a non-discriminatory basis whilst ensuring the orderly, efficient and risk adequate processing of trades executed at the Frankfurt Stock Exchange."
Deutsche Börse is currently weighing up proposed regulation from the European Securities and Markets Authority before making a final decision.