Pipeline Europe, a pan-European multilateral trading facility (MTF) for equity blocks, has added LCH.Clearnet Ltd as a second central counterparty (CCP), joining existing provider EuroCCP.
LCH.Clearnet Ltd, which clears for the London Stock Exchange, and EuroCCP which clears for several MTFs including Turquoise, NYSE Arca Europe and SmartPool, have agreed to interoperate from Q1 next year.
BNP Paribas Securities Services will continue to offer so-called Model B clearing and settlement for Pipeline’s European buy-side clients, under which they settle using BNP Paribas’ settlement account as though they were direct clients of the firm.
According to Pipeline, the new arrangement will allow clients to achieve greater netting benefits and reduce operational costs when trading on the platform, in addition to offering them a choice of clearer.
Pipeline’s clearing and settlement solution will initially be available across more than 5,000 equities in the platform’s 14-country trading universe. As Pipeline expands to cover the remaining countries of the European Economic Area in 2010 the clearing and settlement model with grow to match.
“The addition of LCH.Clearnet opens the door to a genuinely competitive clearing environment,” said Marcus Hooper, executive director of Pipeline Financial in Europe, in a statement. “The combination of LCH.Clearnet, EuroCCP and BNP Paribas Securities Services in this unique model offers an unbeatable competitive and low risk operational model to Pipeline clients.”
Pipeline Europe, a division of US block trading platform operator Pipeline Financial Group, launched its Algorithmic Switching Engine in May.