Following yesterday’s news that European trading platform BATS Europe had added LCH.Clearnet Ltd as a central counterparty (CCP) for UK and Swiss stocks, fellow multilateral trading facilities (MTFs) NYSE Arca Europe and Chi-X Europe now plan to use LCH to clear their trades in addition to their existing CCPs.
LCH and Chi-X Europe have signed a memorandum of understanding around LCH’s provision of CCP services to Chi-X, while NYSE Arca Europe, a displayed MTF owned by transatlantic exchange group NYSE Euronext, has formally selected the clearer, pending regulatory approval.
Through its EquityClear service LCH.Clearnet will clear the blue-chip stocks from 11 European countries traded on NYSE Arca Europe.
Since it first unveiled the MTF last October, NYSE Euronext has been planning to use four CCPs to clear trades on NYSE Arca Europe. The platform cleared through EuroCCP, a subsidiary of US post-trade utility DTCC, from launch and in addition to LCH plans to add EMCF and SIX x-clear.
Chi-X Europe has used EMCF, a pan-European clearer co-owned by the Dutch government and exchange group Nasdaq OMX, since its launch in April 2007. Chi-X now offers trading in 18 indices across 13 European markets – a universe of more than 900 stocks. The platform also trades exchange-traded funds and exchange-traded commodities.
“We believe that participants trading on Chi-X Europe should have a choice of central counterparty services to ensure competition and efficiency at the lowest possible frictional cost,” said Hirander Misra, chief operating officer of Chi-X Europe, in a statement.
LCH.Clearnet Ltd has also announced an average fee cut of 7% for its EquityClear service. Following the cut, more than 50% of volumes will be charged at £0.01 a trade. LCH.Clearnet Ltd, the UK arm of the LCH.Clearnet group, clears for the London Stock Exchange, BATS Europe, Equiduct and PLUS Markets.
This follows last week’s announcement of a 30% fee cut at LCH.Clearnet SA, the group’s French unit, which will take effect from 1 July. LCH.Clearnet SA is the CCP for NYSE Euronext’s European exchanges and also clears for Equiduct.