SIX Securities Services, the post-trade division of Swiss market operator SIX Group, will try to acquire central counterparties (CCPs) in a bid to expand its share of European equity flows, as competition between the region’s clearers heats up.
With trading venues advancing with interoperability programmes that help market participants consolidate their clearing flows with a single clearer, CCPs will be forced to compete on cost and service, rather than simply being a default provider for any particular market.
“We could see some acquisitions of CCPs this year and we are monitoring the landscape for potential purchases in the short-term in addition to our organic growth strategy,” Tomas Kindler, head of clearing relations for SIX Securities Services, told theTRADEnews.com. “But M&A activity is likely to be separate to consolidation of clearers in terms of providers exiting the business, which we view as a longer-term trend.”
The London Stock Exchange Group is already engaged in exclusive discussions to takeover LCH.Clearnet, although no date for the conclusion of talks has been revealed.
BATS Chi-X Europe, the dual pan-European multilateral trading facility (MTF), launched four-way interoperable clearing last Friday, while London Stock Exchange-owned Turquoise launched the first phase of its own clearing choice initiative in November, letting members clear their trades with Anglo-French CCP LCH.Clearnet as well as its incumbent clearer EuroCCP.
SIX x-clear is due to join the scheme on 16 January, with Kindler noting at least one Turquoise member has committed to using his firm as its preferred CCP from day one. Turquoise also plans to add CC&G, the domestic Italian clearing house owned by the LSE.
Nordic-focused MTF Burgundy and Nasdaq OMX Nordic, which runs domestic markets in Denmark, Finland and Sweden, will begin their interoperability schemes during Q2.
In anticipation of fiercer competition between CCPs, EuroCCP, SIX x-clear and EMCF are among those that have announced lower tariffs for clearing equity trades.