The clearing and settlement arms of SIX Securities Services, the Swiss-based post trade securities services provider, has signed a memorandum of understanding with Takasbank and MKK of Turkey to provide international clearing, settlement and custody services. The move is a precursor to the opening up of Turkey’s financial markets to international investment and aligns with SIX Securities Services’ internationalisation strategy.
SIX x-clear and SIX SIS both signed an MoU with Takasbank and MKK, Turkey’s domestic providers for post trade services, to establish international post trade services for Turkey.
Through the agreement, SIX Securities Services will play the roles of international central counterparty (CCP) for the Turkish market and global custodian for Takasbank. In return, Takasbank will become a full-service provider for the Turkish market via a direct central securities depository (CSD) link with SIX SIS. While the custody account has been set up, the direct settlement link with MKK, the CSD, is being worked on and interoperability between SIS x-clear and Takasbank is also planned for the end of next year.
The agreement also covers the exploration of joint business opportunities – especially in the area of Islamic finance products and access to the respective markets.
The MoU, signed in April in Zurich is the result of two years of discussion and collaboration between all four institutions. First benefits of this cooperation are expected as early as 2013.
“We are excited by the prospect of working with the Turkish market as a whole," said Urs Wieland, CEO SIX x-clear. "Now we are focusing on implementation and moving quickly to bring this comprehensive offering to our mutual customers. For SIX Securities Services, this is just the beginning of what we believe to be enormous potential in the region.”
“Turkey is already a large market and it already having reforms to make it more attractive for international investors, including looking at the potential ownership of the post trade market infrastructure," said Thomas Kindler, head of Clearing Relations at SIX x-clear. "For us it also provides a gateway into the Middle East North Africa region. In terms of Islamic finance this is our first exposure to this asset class.”
In other developments, Nordic-focused multilateral trading facility Burgundy is also planning to offer SIS x-clear to as a CCP in a week's time.
Reporting by Janet du Chenne, Global Custodian, an Asset International publication