London Stock Exchange Group to promote dual CCP model for London market
- X-Clear to join LCH.Clearnet as CCP provider
- X-TRM to be used as post-trade router
London Stock Exchange Group today confirmed plans to pursue a dual CCP competitive clearing model for the London market. Subject to final terms being agreed, X-Clear will join LCH.Clearnet as a provider of CCP services to the Group’s London equity market offering.
The decision reflects the Group’s desire to ensure that post trade services enhance the competitiveness of its market offering and provide full, active and timely support for its product and service innovations. It believes that the provision of two competing CCPs in the London market should continue to ensure effective price competition at the clearing layer.
The Group intends to use X-TRM, the award winning post-trade router of Monte Titoli, to manage the trade flows between two competing CCPs and onward to settlement across its markets. X-TRM will be integral to the successful introduction of CFDs onto the London Stock Exchange early next year.
The Group will also pursue the international development of its post trade assets, which already offer service and efficiency levels not matched elsewhere in Europe. It will develop the scale and scope of these services by leveraging its skills and capabilities to support its international growth and the Group’s product innovation initiatives across its diverse range of asset classes.
The proposed model for London forms part of an ongoing review of post trade services across the Group’s markets in an evolving marketplace. Post trade services are integral to the competitiveness of exchange trading services, as the Group continues to innovate at an ever greater pace, and to do so cost and time efficiently.
In its deliberations, the Group is mindful of the European Code of Conduct on Clearing and Settlement. This Code has achieved many favourable outcomes as a direct result of the price transparency and unbundling provisions. In addition, the policy goals of more competitive pan-European offerings appear to have been achieved, although the aspects of the Code relating to interoperability raise important implementation, market efficiency and systemic risk issues.
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About the London Stock Exchange Group:
London Stock Exchange Group is Europe's leading diversified exchange business. It operates Europe's largest and most liquid equity market, holds the number one position in trading ETFs and securitised derivatives, and through its interest in MTS, is the leading platform for the trading of fixed income products.
The London Stock Exchange itself is the world's most international exchange with over 700 overseas companies from over 70 countries on its markets. It has consolidated this position in the last two calendar years, having attracted 202 international companies which raised nearly £30 billion between them. These figures include international companies on AIM, the London Stock Exchange's growth market, which has grown to become the world's most successful market for small and medium sized enterprises with close to 1700 companies at the end of 2007.
Following its merger with Borsa Italiana in 2007, London Stock Exchange Group also now offers post-trade services such as netting, clearing and settlement on an efficient and competitive basis, and a comprehensive range of European bond trading services through MTS.