Ten Years of Competitive Clearing

This long weekend marks the 10th anniversary of the launch of Competitive Clearing for Equities.

It was on Monday 5th May 2003 that virt-x exchange, the former Tradepoint (and subsequently re-named SWX Europe), fulfilled its launch commitment to provide pan-European market participants with their own choice of clearing, through either LCH or the newly formed Swiss clearer SIS x-clear (now SIX x-clear). London Stock Exchange followed suit several years later.

The various new markets established around the launch of MiFID in 2007 (including Chi-X, Turquoise, and others) prompted new entrants to Clearing, particularly EuroCCP and EMCF. When these old and new venues sought to inter-operate, there were regulatory concerns based on systemic risks, such as contagion, which led to a moratorium in 2009. Arrangements were duly made to address these concerns, and since mid 2011 there has now been a succession of announcements of Competitive Clearing by market operators.

Early in 2013 the threshold was reached that more than 50% of all European Equities trading now takes place on markets that offer Competitive Clearing, demonstrating the popularity of this feature to market participants.

The acorns, planted when SWX invested in virt-x exchange, have now become a sturdy oak forest.