The London Stock Exchange Group (LSEG) has been selected to provide technology and related services to a new cross-market central counterparty (CCP) mechanism for central and eastern European capital markets.
The agreement, signed with Austrian capital market infrastructure provider OeKB, provides for the creation of a new platform, CCP.CEE – a standardised cross-regional clearing infrastructure for equity markets located in Vienna, Prague, Ljubljana and Budapest. It is due to begin its rollout in Vienna in mid-2012, with the Prague cash markets to follow soon after.
CCP.CEE has been established by the Austrian clearing house, CCP.A, a 50:50 joint venture between Oesterreichische Kontrollbank Aktiengesellschaft (OeKB), Austria's financial service infrastructure provider, and Wiener Börse, which owns CEE Stock Exchange Group (CEESEG), the holding company for the Austrian, Czech, Slovene and Hungarian exchanges.
The platform's software has been designed by LSEG and developed by the exchange group's technology subsidiary, Millennium IT. It will be operated by LSEG from its IT facilities in London and Milan.
“The platform is theirs,” said an LSEG spokesman. ”Millennium IT will help provide the technology and maintenance, but it's still Vienna's creation.”
According to CCP.A, the new CCP will ease access to CEESEG markets for new investors and market participants, while reducing post-trade risk and costs.
“An integrated clearing solution forms another logical and necessary step to enhance the liquidity of the local markets in the region,” said Ludwig Niessen, managing director of CCP.CEE. “International institutional investors and trading partners expect a significantly easier access to the markets and an increased netting efficiency at lower costs for risk and collateral management.”
Kevin Milne, director of post trade at LSEG, added. “This will enable CEE markets to benefit from an advanced real-time clearing platform. We look forward to working in partnership with CCP.CEE to expand this initiative within the CEE region.”
CEESEG has already been working to implement Xetra, the trading platform used by Deutsche Börse, across all its venues. The group is also developing a cross-membership scheme to enable members of one exchange to more easily trade across the whole group.