Users of EMCF, Fortis’s pan-European clearing platform, have no plans to switch to a rival system following the bank’s part-nationalisation today, despite an offer from competitor EuroCCP to take on its MTF clients.
The governments of Belgium, the Netherlands and Luxembourg have invested a total of EUR 11.2 billion to rescue the troubled bank. Following the news, EuroCCP, a subsidiary of US clearing house DTCC and the clearing provider for Turquoise, a multilateral trading facility (MTF), issued a statement today saying it has the capacity to process the trades for all MTFs that have appointed EMCF as their clearer. EMCF’s users so far are Chi-X Europe, Nasdaq OMX Europe and BATS Europe. Both Chi-X and Nasdaq OMX Europe are up and running, and BATS Europe is scheduled to launch on 31 October.
“Our industry-owned, industry-governed, at-cost business model ensures that our very high safety standards are not compromised by profit-seeking behaviour,” said Diana Chan, CEO, EuroCCP, in the statement. “Not only in times like these but also for the ultimate safety of the financial system, what the market needs is an independent, focused central counterparty that is properly managed as befits a critical market infrastructure.”
But two of the three MTFs using EMCF told theTRADEnews.com they have no plans to switch yet. “We are in regular discussion with EMCF and we have been reassured that it’s very much business as usual from their side,” said Jonas Rodny, spokesman for Nasdaq OMX Europe. “We are continuing to monitor the situation.”
A spokesperson for Chi-X also confirmed that there would be no change of clearing at Chi-X. A statement on Chi-X’s website reads, “EMCF will continue to provide central counterparty services by guaranteeing trades conducted by participants on Chi-X Europe with no changes to current operational procedures.”
A spokesperson for BATS declined to comment.BATS Europe was due to start testing on EMCF today, with testing scheduled for completion on 10 October.
A Fortis spokesperson said it should be business as usual at the firm despite the rescue by the three governments. “The announcement today is not about operations, it is about reinforcing the capital, so basically nothing will change at Fortis,” the spokesperson said.