01 October 2009 News

 

LCH.Clearnet and EMCF set to interoperate by November

LCH.Clearnet and the European Multilateral Clearing Facility have signed a master link agreement to achieve interoperability by November 2009.

In November trading participants on Chi-X and Bats Europe will be able to choose where their UK and Swiss equity trades are cleared. Interoperability, in theory, could bring some advantages to the European equities environment. By making it easy to choose your clearer, they may become more competitive on pricing.

This is not supported by the US experience however. In the US the Depository Trust and Clearing Corporation is a user-owned, not-for-profit utility and it provides efficient, reliable clearing at a lower cost than any clearing facility in Europe.

Wayne Eagle, director for equity services at LCH.Clearnet said: "We have made excellent progress since we first announced our plans to interoperate with EMCF only four months ago. Our aim is to deliver the benefits of clearing interoperability as soon as possible and in signing this agreement, we are another step closer."

Jan Booij, chief executive of EMCF said: "Clearing interoperability will create a more open and transparent clearing process, and offer much greater choice for clients. This is an important step for the industry."

The arrangement between LCH.Clearnet and EMCF is in line with the Access and Interoperability Guidelines within the European Code of Conduct and is subject to regulatory approval.