European Central Counterparty (EuroCCP) will clear trades executed on the London Stock Exchange (LSE), pending regulatory approval.
EuroCCP will use cross-platform netting so that UK stock trades can be netted with LSE trades into one single settlement, regardless of where they are executed. The firm said that it is possible to save at least 50% of settlement costs through this service.
“Many market participants have been waiting to have more choice in where they clear trades executed on LSE. The addition of EuroCCP to the CCPs already available will bring the benefits of more competition together with reduced costs,” said Diana Chan, CEO of EuroCCP.
LSE trades are expected to be able to support cross-platform netting from Q3 2014 onwards.Cross-platform netting of UK equities by central counterparties (CCPs) has been possible since 2013 for trades executed on multilateral trading facilities.
The firm already clears UK equities trades executed on Aquis, BATS Chi-X, Equiduct, GETMatched, Sigma-X, SmartPool, Turquoise and UBS MTF.
Interoperability arrangements are already in place between EuroCCP and the incumbent clearers for LSE, LCH.Clearnet and SIX x-clear.