Multilateral trading facilities and pan-European clearing providers wanting to operate in Italy will now have to wait until 13 October to access the market following a delay in the Italian central securities depository’s migration to the London Stock Exchange’s TradElect trading platform.
Monte Titoli, Italy’s central securities depository (CSD), is part of the Borsa Italiana group, which the
London Stock Exchange (LSE) bought last year. The group, including Monte Titoli, had been scheduled to migrate to TradElect by 29 September, but this has been pushed back to 13 October. The LSE attributes the delay to the recent market turmoil. The clearers cannot access Monte Titoli before the TradElect migration is complete.
The new delay has frustrated some MTFs and clearers, who had already postponed their Italy launches because of the TradElect migration. Both Turquoise and Chi-X Europe, who clear by EuroCCP and EMCF respectively, had intended to start trading in the country on 15 August. But on 17 July, shortly before testing between the platform’s clearers and Monte Titoli was due to start, the CSD announced that testing would be delayed because of the migration to TradElect.
“We can’t launch in Italy until such time as we can get access to Monte Titoli,” Peter Randall, CEO of Chi-X Europe, told theTRADEnews.com. “This delay further entrenches the monopolist, further prevents competition and further hurts consumers.”
Diana Chan, CEO of EuroCCP, expressed frustration that her client’s Italian launch is effectively in the hands of a competitor. “Why should the ability of Turquoise to trade Italian securities be tied to Borsa Italiana moving to a newer and faster trading platform?” she asks. “Because of the law in Italy, EuroCCP needs to have a direct account with Monte Titoli, and therefore our ability to settle Italian securities is completely controlled by an entity that is in the same group as the trading platform that our client is competing against.”
Jan Booij, managing director of Fortis subsidiary EMCF, said the loss of two weeks’ potential revenues from Italian trading was not a big issue for his firm. But he added, “I can imagine that market participants, and especially MTFs, are not happy with this postponement.”
According to the LSE, the 29 September migration date was never set in stone. “We had given the market indicative dates for the migration, but it was subject to customer readiness, and given the events of the last couple of weeks, we have moved the date back to allow customers a bit more time,” said an LSE spokesperson.
Despite this, Chi-X issued a trading notice to users on 8 September asserting that it would start trading Italian stocks on 29 September, and the section on Chi-X’s website detailing future launches still lists Italy as being available from that date – although the MTF informed users of the delay in a trading message on 23 September.
Chan at EuroCCP tried to prevent further hold-ups. “I have tried to get Monte Titoli to commit to enable us to go live regardless of TradElect being delayed, because I could see this delay coming, but they have not been willing to commit, so still as of now we are completely tied to the TradElect implementation,” she said.
Nevertheless, there is light at the end of the tunnel for the traders and clearers wanting access to Italy. Further delays to the TradElect migration are unlikely. “I would be surprised if they postponed it again,” said Booij.
According to its 23 September trading notice, Chi-X is planning to start trading five component stocks of Italy’s S&P MIB40 index from October 13. These are Enel, ENI, Fiat, Intesa Sanpaolo and UniCredit. It plans to add the remaining index constituents on 20 October.
According to a draft list of Italian launch stocks on Turquoise’s website, the MTF is planning to start trading UniCredit, ENI, Fiat, Tiscali and Beni Stabili – the latter two in its non-displayed book – initially, after which it will ramp up to a full list of 224 Italian stocks.