Chi-X® Europe Limited, operator of the largest pan-European
equity multilateral trading facility (MTF), today announced that it
intends to introduce a “user choice” clearing model following the
Memorandum of Understanding (MOU) signed today by European Multilateral
Clearing Facility N.V. (EMCF) and SIX x-clear Ltd. to interoperate. This
will make Chi-X Europe the first MTF to offer its participants the
ability to clear though multiple central counterparty (CCP) firms.
In response to demand from its participants, Chi-X Europe has been in
discussions with its current CCP, EMCF, and other CCPs to identify ways
to help participants further reduce overall clearing costs through an
interoperable business model.
This development will allow clearing participants to choose a single CCP
for activity relating to any given market segment for a variety of
different trading venues, eradicating the need to fund cross margin
arrangements across different CCPs. This should lower participants’
overall trading costs and enable them to manage risk more effectively.
Commenting on the announcement, Hirander Misra, COO of Chi-X Europe,
said, “We believe that the choice and competition offered through this
horizontally integrated CCP model will result in lower prices, better
service and further innovation. We applaud the efforts of both CCPs in
cooperating for the benefit of the industry.”
Marco Strimer, CEO of SIX x-clearAG, added, “This move marks an
important step towards offering customers choice in their clearing
arrangements. As a fierce proponent of interoperability and the benefits
it brings to the industry and clients alike, the prospect of working
with Chi-X Europe to bring about significant change is particularly
exciting. We welcome its foresight in pursuing competitive clearing and
see this as evidence of wider industry support for full pan-European
interoperability.”
Jan Bart de Boer, Chairman of the Supervisory Board of EMCF, said, “EMCF
has proven that in post-trading, competition, not consolidation,
delivers better and cheaper services for market participants.
Interoperability is crucial for fair competition.”
Robert Barnes, Managing Director, Equities at UBS Investment Bank,
added, “Chi-X Europe’s introduction of ‘user choice’ is a smart
pan-European response to requests for a mechanism to help reduce
frictional front-to-back costs. The beauty of this model is that
benefits are available to those who feel it is in their interests to
switch CCPs without forcing costs on those that wish to stay. This will
encourage providers to remain nimble on fees and functionality.”
Subject to the terms of EMCF and SIX x-clear’s Memorandum of
Understanding, Chi-X Europe anticipates that clients should be able to
clear with SIX x-clear during the summer of 2009 subject to regulatory
approval.
About Chi-X® Europe
Chi-X Europe Limited is an FSA-authorised securities firm operating as a
multilateral trading facility (MTF) for the trading of a wide range of
European equities. Chi-X Europe’s low-cost, streamlined operating model
is designed to help participants achieve ultra-low execution, clearing
and settlement costs, and benchmark tests have shown the Chi-X Europe to
be significantly faster than Europe’s traditional equity exchanges.
Chi-X Europe disseminates real-time market data to clients directly and
via third-party market data vendors at no cost, and off-exchange trade
reporting is available for a low monthly fee. For more information,
please visit www.chi-x.com.
©2009 Chi-X Europe Limited. All rights reserved. CHI-X is a registered
trademark in the UK and Europe. Approved for distribution in Europe by
Chi-X Europe Limited, which is authorised and regulated by the Financial
Services Authority.
Instinet
Mark Dowd, 212-310-5331
First Vice President, Global
Corporate Communications & Public Relations
mark.dowd@instinet.com
or
Streets
Consulting Ltd. for Chi-X Europe Limited
Julia Streets, + 44 7976
205552
julia.streets@streetsconsulting.com
