Central counterparty (CCP) LCH.Clearnet will provide clearing services to Galaxy, the multilateral trading facility owned and operated by systems vendor TradingScreen, due for launch in June 2011, subject to regulatory approval.
The CCP will deliver an automated and integrated post-trade solution for euro-denominated bonds. Settlement instructions will be processed via LCH's existing connectivity to international central securities depositories and European national central securities depositories, thereby facilitating simple implementation and adoption by clients, who will also be able to clear new asset classes using their current arrangements.
Galaxy has been certified for the provision of clearing services for euro-denominated bonds by the now defunct Cassiopeia Committee, which was a Paris-based industry body supported by the French government, formed in 2010.
The committee was established to explore ways of introducing secondary corporate bond platforms in Europe and address market demands to improve transparency, liquidity, post-trade services and reporting. Following the publication of opinions supporting three projects for developing bond-trading platforms the committee was wound down on 15 November.
“We have worked closely with Galaxy to enhance transparency and certainty in the euro-denominated bonds markets, in line with regulators' aims to reduce systemic risk by bringing more over-the-counter products into clearing,” said Christophe Hémon, chief executive of LCH.Clearnet.