Turkish stock exchange Borsa Istanbul has acquired the London Metals Exchange’s (LME) stake in pan-European clearing house LCH.Clearnet, a move that could strengthen its ties with London Stock Exchange Group (LSEG).
LME’s stake amounted to approximately 2% of LCH and its sale formed part of a wider deal with Borsa Istanbul that will see it develop steel market products.
Last year, LME launched its own clearing house, bringing to an end an arrangement which enabled its contracts to be cleared through LCH.
The deal follows hot on the heels of a partnership agreement between Borsa Istanbul and LSEG, which owns a majority stake in LCH.Clearnet.
The deal with LSEG will see its derivatives market offer trading in futures and options in the BIST 30 index and leading Turkish stocks, with LCH.Clearnet providing clearing services.
By the end of 2015. LSEG and Borsa Istanbul also hope to launch an index partnership, which will enable Turkish indices to tap FTSE technical expertise and deliver index products with enhanced accessibility to international investors.
Earlier this month, Borsa Istanbul confirmed it will go public and list up to 43% of its capital through the sale of shares currently owned by the Turkish Treasury. The move is expected to enhance support for the exchange from international financial institutions.
Additionally, Robert Barnes, the CEO of LSEG majority owned pan-European exchange Turquoise, is chair of TheCityUK’s Turkey Advisory Group, which is working to build closer links between Turkey and London.
Turkey is one of the fastest growing economies in Europe and Barnes told The TRADE news earlier this year that Istanbul could become a major hub for investment across South Eastern Europe and the Middle-East.
In late 2012 the country implemented a series of capital markets reforms, intended to make many of its rules and regulations compatible with MiFID in order to attract European investors, as well as following other international best practices. The demutualisation of Borsa Istanbul is seen as the next major step in the reform of capital markets in Turkey.