The London Stock Exchange Group (LSEG) has announced plans to launch a swaps trade repository and taken another step towards its acquisition of LCH.Clearnet as plans to bolster its derivatives business progress.
LSEG has applied to the European Securities and Markets Authority, which has oversight of trade repositories as per its responsibilities under the European Securities and Markets Authority, to register UnaVista as a reporting destination for all asset classes.
The market operator said it expects approval of UnaVista as a trade repository by June 2013. Reporting of swaps trades under EMIR – Europe’s OTC derivatives reform package that also includes an obligation to centrally clear OTC derivatives and trade them on exchange-like platforms – will begin 90 days after the first trade repository has been approved by ESMA.
“We expect the reporting of interest rate and credit derivatives to become a requirement by September 2013 followed by all other derivative asset classes in January 2014,” read a statement from UniVista.
UnaVista currently operates as a European Approved Reporting Mechanism under MiFID. By being certified as a trade repository for all asset classes and venues, customers will only need to connect once to meet EMIR and MiFID reporting requirements.
The exchange also announced it has received the necessary shareholder approvals for its revised bid for Anglo-French clearing house LCH.Clearnet, allowing it to acquire 55.5% of the firm’s shares. The deal has now been signed off by UK regulator the Financial Services Authority and is expected to close in the coming quarter, subject to clearing the final hurdles.
Trading plunge
Meanwhile, the LSEG’s latest results statement for the 11 months ending 28 February 2012, showed a substantial fall in secondary trading across equity and derivatives markets.
Average daily value traded dropped by 15% on the UK market to £901 billion in the latest period from £1,060 billion in the 11 months ending 29 February 2012.
The group’s Turquoise multilateral trading facility declined by 20% over the same period, while trading on Borsa Italiana slumped by 16%.
Derivatives trading fared even worse, with Turquoise trading 22.8 million contracts, a 38% decline compared to the previous period, and IDEM, the LSEG’s Italian derivatives subsidiary, declining 23% to 33.5 million contracts.