Chi-X Europe to Offer Three-Way CCP Interoperability

Chi-X Europe has extended its “user choice” clearing model after the signing of a Memorandum of Understanding (MOU) by European Multilateral Clearing Facility N.V. (EMCF) and LCH.Clearnet Group to interoperate in the U.K. and Swiss markets.

This will enable Chi-X Europe to offer participant a choice through three-way central counterparty interoperability. Clearing participants can choose a single CCP for activity related to any given market segment for a variety of trading venues, which reduces the need to fund cross margin arrangements with different CCPs.

Ultimately this aims to lower participant’s trading costs and help them manage risk more effectively.

In a statement, 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 all three CCPs in cooperating for the benefit of the industry. We urge the London Stock Exchange and the SIX Swiss Exchange to also offer their trade feeds to EMCF so that the additional user benefits of bidirectional interoperability can be achieved.”

Added Jan Booij, CEO of EMCF, “EMCF has proven that in post-trading, competition, not consolidation, delivers better and cheaper services for market participants. Interoperability is crucial for fair competition.”