Cboe has joined forces with four leading European trade associations to call on policymakers to mandate cash equities clearing interoperability between central counterparties under the Market Integration and Supervision Package (MISP) reforms, The TRADE can reveal.
In a joint letter with the Association for Financial Markets in Europe (AFME), the European Banking Federation (EBF), the European Fund and Asset Management Association (EFAMA) and the European Principal Traders Association (EPTA), the firms outline that “greater ambition is warranted” in MISP, and the mandate would enhance competition and user choice across European markets.
Speaking to The TRADE, Vikesh Patel, global head of clearing and president at Cboe Clear Europe, said: “This statement demonstrates the strong level of support from across the European trading community for clearing interoperability in Europe’s cash equity markets.”
The industry bodies also made reference to the current clearing landscape in European cash equity markets, recognising that while open access arrangements exist, many firms still maintain multiple CCP relationships and fragmented clearing arrangements, limiting consolidation and collateral optimisation.
Specifically, the letter proposes five recommendations to MISP, spanning: mandating interoperability, aligning with Mifir articles 35 and 36, reviewing EMIR article 51, providing consistent supervisory oversight and delivering open access benefits.
Read more – EU’s MISP should improve investor outcomes, not complicate markets, EPTA affirms
Patel added: “We now need to finish the job by mandating full clearing interoperability in those markets that remain outside this framework. Doing so would represent one of the key steps towards a truly competitive and integrated European capital market, and MISP presents a unique opportunity to extend the proven benefits of interoperability across the EU.
“The entire market stands to benefit from a more efficient post-trade infrastructure that facilitates cross-border equity trading, reduces clearing and settlement costs, and supports deeper and more liquid markets.”