EuroCCP Gears Up for January Launch in Nordic Markets
EuroCCP, Fortis EMCF and SIX x-clear – the three central counterparties (CCPs) that will interoperate to serve clients of Nasdaq OMX’s stock exchanges in Denmark, Finland and Sweden – have agreed to a Jan. 29, 2010, start date for their interoperability.
Establishing the timetable is one of several agreements EuroCCP and its fellow CCPs are tackling in preparation for the opening of these Nordic markets to competitive clearing services. The CCPs must also finalize the terms of their interoperability agreement and work out testing schedules.
EuroCCP is meeting with potential customers and getting ready for the expansion of its services to clear for its first national stock exchange, a significant milestone in the business development of EuroCCP.
“We’re preparing for a busy August and fall,” said Neil Henderson, DTCC managing director, EuroCCP Product Management. “Beyond the legal work on the interoperating agreements, we’ll focus on explaining EuroCCP services and risk management capabilities to prospective clients and helping them with our onboarding procedures.”
Competitive clearing
The arrival of multiple CCPs in Denmark, Finland and Sweden will mark a critical milestone in the evolution of post-trade processing there. At present, Fortis EMCF is the sole provider of central counterparty clearing to Nasdaq OMX users in the Nordic region, and this is an optional service. But, starting Oct. 9, 2009, subject to regulatory approvals, Nasdaq OMX intends to make CCP clearing mandatory for the exchanges in these markets. Fortis EMCF will remain the only CCP option until January 29, when users will be able to switch to EuroCCP or SIX x-clear.
Interoperability between the three CCPs will enable each member of Nasdaq OMX Nordic’s exchanges to choose the clearing house that will clear and settle its trades.
“EuroCCP looks forward to helping deliver a truly competitive choice of clearers to firms trading on the Nasdaq OMX Nordic exchanges,” said Diana Chan, CEO of EuroCCP. “Furthermore, we hope our work in drawing up an interoperability agreement with EMCF and x-clear will provide the foundation for an Interoperability Convention all CCPs that link up in Europe can sign. An Interoperability Convention will make it transparent to market participants, trading venues and regulators how the CCPs manage their risk exposure to each other, and will make the arrangements safer.”
So far in 2009, EuroCCP representatives have met often with regulators and securities dealers associations in the region. In the coming months, as the company conducts extensive outreach to prospective customers in the three markets, EuroCCP representatives will make even more frequent trips to the region. In addition to one-on-one meetings, EuroCCP plans to organize seminars for prospective clients to assist with their membership application process.
EuroCCP and corporate parent DTCC are becoming more active in financial services sector activities in the Nordic region. In late September the companies will participate in the Eurofi Financial Forum, taking place September 29-October 1 in Göteborg, Sweden. EuroCCP is a co-sponsor of this year’s forum, and Donald F. Donahue, DTCC chairman and CEO, will participate in a panel on September 30. @