European clearing houses EuroCCP and SIX x-clear have signed a memorandum of understanding outlining their commitment to interoperate with one another, allowing trading platforms that use the companies to offer a multi-central counterparty (CCP) model. The two clearers plan to implement the link in Q3 2009, subject to regulatory approval.
Pan-European multilateral trading facility (MTF) Turquoise will be the first platform to offer the choice between the two CCPs. This closely follows the MTF’s decision earlier this week to appoint LCH.Clearnet Ltd as an additional clearer to EuroCCP, which it has used since launch.
The agreement between EuroCCP and x-clear has been designed generically to allow
any trading platform to implement a multi-CCP model quickly, the two clearers said.
“This groundbreaking agreement between EuroCCP and SIX x-clear is leading the way for the post-trade industry to develop an open architecture in central counterparty clearing in Europe, and moves Europe closer to the goal of interoperability among CCPs envisioned by the European Code of Conduct for clearing and settlement,” said Diana Chan, CEO of EuroCCP, in a statement. “It will further encourage competition among trading venues as intended by the provisions of MiFID.”
Marco Strimer, CEO of SIX x-clear, added, “The development of standards and protocols for interoperability as a core market service is significant. It represents a major step forward in providing benefits to the industry infrastructure and their clients alike.”
This latest MOU follows a string of multi-CCP announcements this week. LCH.Clearnet Ltd has forged agreements to clear for four MTFs – Chi-X, Turquoise, BATS Europe and NYSE Arca Europe, paving the way for future links with EuroCCP and European Multilateral Clearing Facility (EMCF), the incumbent CCPs for the platforms. EuroCCP clears for NYSE Arca Europe in addition to Turquoise, and EMCF is the CCP for Chi-X, BATS Europe and Nasdaq OMX Europe.