The London Stock Exchange (LSE) today went live with its multiple clearing service, which enables clients to choose between two clearing providers for securities trades executed on the exchange.
From today, SIX x-clear, the clearing division of Swiss exchange group SIX, will act as a central counterparty (CCP) for the LSE, in addition to LCH.Clearnet, the exchange’s incumbent clearing provider. Trades will be routed by Euroclear UK and Ireland (EUI) to either of the two CCPs then settled by EUI.
The LSE intends to add another trade flow mechanism to route between itself, its clearers and its settlement provider. It is expected that at least some of this process will be handled by X-TRM, the post-trade router provided by Monte Titoli, Italy’s central securities depository, which is now owned by the LSE following its merger with Borsa Italiana last year.
The LSE first reached an agreement with SIX x-Clear to allow it to clear the exchange’s trades back in May 2006. The exchange had originally intended to start offering the ability to clear through x-clear during the first half of 2007.
In October, US post-trade services provider Depository Trust and Clearing Corporation (DTCC) announced its intention to buy LCH.Clearnet for EUR 739 million. The merger of the two firms will create the first transatlantic clearing house.