SecFinex Limited, a NYSE Euronext Company and European electronic trading platform for equity finance, and SIX x-clear AG, the Central Counterparty (CCP) and licensed Swiss bank, have signed an agreement to launch CCP services for stock borrowing and lending across the SecFinex Order Market multilateral trading facility for key European markets. The agreement will cover stock loan transactions in Austria, Denmark, Finland, Germany, Norway, Sweden and Switzerland. Once the initial phase of the project is launched, SecFinex and SIX x-clear have indicated the intention to extend services to additional European markets.
The launch of this service will enable stock borrowing and lending markets in these countries to take advantage of the services offered by a CCP. This follows a previous SecFinex announcement on the introduction of CCP for equity finance in Euronext markets (Belgium, France, Holland and Portugal). Market participants will benefit from reduced risk, complete trading anonymity and operational efficiencies.
The CCP directed trades on the SecFinex marketplace will eliminate bi-lateral credit risk between lender and borrower and will significantly reduce the capital required to support stock loan transactions. The introduction of SIX x-clear's CCP service is likely to significantly increase market volumes and will enable market participants, through general clearing arrangements, to access more markets and new counterparties. SecFinex and SIX x-clear anticipate a launch of the initial phase of the CCP marketplace in the 2nd Quarter of 2009. Both user groups and leading investment organizations have been widely consulted in planning the service to ensure it meets users' needs.
"We are very pleased to work with SecFinex and provide clearing services in an important market where the need to mitigate risk is paramount. SecFinex has ambitious plans for European growth and we are delighted to partner with them and share our market knowledge and expertise. Given current economic conditions there has never been a bigger appetite for cleared infrastructure. We look forward to continuing to provide the associated benefits of reduced risk in trading activity across whichever markets our clients' request," said Marco Strimer, CEO of SIX x-clear AG, in a press release. Peter Fenichel, CEO of SecFinex, said in the release, "We are delighted to partner with SIX x-clear in serving our clients by enhancing SBL market efficiency, transparency and transaction activity. We believe the agreement with SIX x-clear compliments a broader effort to bring positive changes to the equity finance markets. We believe the SecFinex marketplace, linked to SIX x-clear, will provide our clients with significant advantages that will serve to reduce capital requirements, lower risk for borrowers and lenders and broaden participation in current difficult markets."