Exchange group NYSE Euronext's plans to overhaul its clearing services have moved ahead with the appointment of a new team to lead the implementation of its new strategy and consult with market participants.
In May 2010, NYSE Euronext served notice on its current clearing provider LCH.Clearnet in order to launch its own purpose-built clearing facilities in Paris and London.
At the time of the announcement Garry Jones, executive vice president and global head of derivatives, NYSE Euronext, told theTRADEnews that his firm's goal is to, “be an integrator of financial communities rather than just a trading exchange”.
He added that having dedicated clearing services would be crucial to ensuring that NYSE Liffe, the group's European derivatives exchange, could compete with the likes of Eurex, the derivatives exchange owned by Deutsche Börse, which also has a vertical clearing structure.
Heading the new implementation team will be Mark Ibbotson, formerly chief operations officer of NYSE Euronext's global derivatives business, who has been appointed executive vice president, global clearing. Ibbotson will report to group CEO Duncan Niederauer. Joining Ibbotson's team will be Declan Ward, executive director of NYSE Liffe clearing in London, and Michel Favreau, the exchange's clearing project director in Paris.
Favreau, who most recently ran the clearing division of the Montreal Exchange, will lead the Paris clearing house project, while Ward, who has led the exchange's central counterparty operations in London since 2009, will take responsibility for the London facility. They will both liaise with other members of NYSE Euronext's cash equities and derivatives team to ensure a common approach is adopted. An internal steering committee comprising Jones and Roland Bellegarde, the group's executive vice president and head of European execution among others, has already been appointed to ensure these objectives are met.
The implementation team will also be responsible for engaging with customers and regulators to consult on various aspects of the design, a process that is set to begin soon. The initial design phase is complete, with main construction phases expected to start in 2011. The London clearing house is scheduled for completion by Q3 2012, with Paris following shortly after in Q4 2012. An independent board of directors will also be appointed closer to the launch of the new clearing houses.
According to a NYSE Euronext spokesperson, the project in France will take longer to complete as banking, guarantee and default management arrangements for clearing derivatives trades need to be established. These are already in place in London, albeit via LCH.Clearnet.
“Clearing is an essential component to the safety and soundness of the markets and we look forward to engaging with customers, regulators and suppliers as we now translate our clearing house design work into more detailed delivery plans,” said Ibbotson.