The London Stock Exchange Group (LSEG) this week announced the launch of a new central securities depository (CSD) to meet regulatory overhaul of Europe’s post-trade environment, while the chief of recently acquired global clearer LCH.Clearnet steps down.
The LSEG will form a Luxembourg-based CSD that will provide clearing and settlement services and run alongside its existing Italian CSD, Monte Titoli.
The new entity will use infrastructure developed by Monte Titoli but will operate as a separate business with its own management structure. LSEG confirmed to theTRADEnews.com it had no plans to combine the two entities.
The new CSD will operate an open-access model and will help enable customers to meet changing regulatory obligations, such as the European market infrastructure regulation (EMIR). The new regulatory regime requires central counterparties (CCPs) to post collateral to securities settlement systems such as CSDs in case of default.
J.P. Morgan has already signalled its intention to use LSEG for settlement, custody and asset services for its international collateral management business, LSEG said in a statement.
Speaking of the new CSD, Raffaele Jerusalmi, CEO of Borsa Italiana and director of capital markets for the LSEG, said: “The Group is well placed to provide a full range of post trade services to meet the evolving needs of our customers arising from on-going financial regulatory change and the continued focus on operational efficiency.”
Meanwhile, the chief executive of LCH.Clearnet, Ian Axe, today announced he would step down, months after LSEG’s acquisition of the CCP was formally completed.
Axe joined the global clearing house two and a half years ago and was instrumental in cementing the deal with LSEG, which he described as a key achievement.
“With the post transaction programme between the businesses well underway, I now feel that I can think about new opportunities,” Axe said.
Revenues for LSEG for Q2 were up 39% year-on-year, with £249.7 million, up from £179 million for the same period last year. Since becoming part of LSEG in May, LCH.Clearnet contributed £60.7 million.