Burgundy, a multilateral trading facility for Nordic securities, has chosen European Multilateral Clearing Facility (EMCF) as its central counterparty (CCP), and is looking to add other clearers as the platform develops. Burgundy aims to start trading in Q2 this year and introduce full CCP clearing in October. Before then, participants will clear trades on the platform bilaterally.
“We have decided to open up to competitive clearing,” Olof Neiglick, CEO of Burgundy, told theTRADEnews.com. “Once the project matures, we will add more CCPs. Two additional clearing providers will be available in the Nordic market by the end of the year.”
Burgundy chose EMCF as its initial clearing provider based on the preferences of the banks and securities firms in the consortium that founded the platform. “A number of the banks are already members, so it had a first-mover advantage,” said Neiglick.
Burgundy’s shareholders are Avanza Bank, Danske Bank, D. Carnegie & Co, DnB NOR, Evli Bank, HQ Bank, Kaupthing Bank (Sweden), NeoNet, Nordea, Nordnet, SEB, Svenska Handelsbanken, Swedbank and Öhman.
Burgundy trades will be fully fungible with those conducted on other trading platforms connected to EMCF. “You will be able to buy a position on one platform and sell it on Burgundy, for example. That is extremely important for efficiency,” said Neiglick. “There is full netting and cross-clearing between all platforms connected to EMCF.”
EMCF currently clears trades for three pan-European multilateral trading facilities – Chi-X, BATS Europe and Nasdaq OMX Europe – and will be one of the clearing options for the NYSE Arca Europe MTF, scheduled for launch in Q1 this year. It has also been chosen as the CCP for Nasdaq OMX Nordic Exchange, following Nasdaq OMX’s purchase of a 22% stake in EMCF from its parent, Fortis Bank Nederland, last year. As such, it is the Nordic region’s first CCP.