Nasdaq OMX Nordic, operator of stock exchanges in Denmark, Finland and Sweden, has said it will launch its clearing interoperability solution from April next year.
The Scandinavian exchange operator will initially offer clearing choice between EuroCCP, the European clearing arm of US post-trade utility Depository Trust and Clearing Corporation, Swiss clearer SIX x-clear and the exchange group's incumbent central counterparty (CCP) EMCF.
Offering traders the ability to consolidate their flows with the clearing house of their choice reduces trading costs and also compels CCPs to compete on service. Many CCPs, including EuroCCP,EMCF and SIX x-clear, have already slashed clearing fees in preparation for interoperability.
“A solution with a truly competitive choice of clearers will increase the attractiveness of the Nordic equities market and result in liquidity and cross netting advantages that will benefit our members,” said Petri Simberg, chairman of the Nordic Securities Association.
While the London Stock Exchange (LSE) was the first bourse to offer clearing choice, with the addition of SIX x-clear in September 2008, Nasdaq OMX's planned introduction of interoperability will mark a rapid development of post-trade infrastructure in the Nordic region. Central counterparty clearing with EMCF, in which Nasdaq OMX owns a 22% stake, was only introduced to Denmark, Finland and Sweden in late 2009.
CCP services in the Nordics are currently available for large-cap stocks traded in Denmark and Sweden, and for Finnish large- and mid-cap stocks. Norwegian shares, which can be traded from Nasdaq OMX Stockholm, and exchange-traded funds listed in Sweden and Finland, are also eligible for CCP clearing.
Multilateral trading facility (MTF) BATS Europe launched its own interoperability model in July with SIX x-clear, LCH.Clearnet and EuroCCP.
Under BATS' scheme, trading participants on both sides of the trade must nominate the same preferred clearer, with EMCF, BATS Europe's incumbent clearer, acting as default CCP if the brokers do not agree. EMCF had previously declined to participate in interoperability schemes, but has since relaxed its stance and will join BATS' service next year.
EMCF will also participate its Chi-X Europe's four-way clearing choice model that is due to launch in January 2012 along with EuroCCP, LCH.Clearnet and SIX x-clear.
Meanwhile, Turquoise, the MTF majority-owned by the LSE, will offer its members the ability to clear trades using EuroCCP, SIX x-clear, LCH.Clearnet or Cassa di Compensazione e Garanzia, the Italian clearing house acquired by the LSE as part of its takeover of Borsa Italiana in 2007.