The London Stock Exchange (LSE) has been revealed as a participant in the consortium of inter-dealer brokers and investment banks that is considering a cash offer for LCH.Clearnet.
The European consortium has mooted a potential counter offer for the Anglo-French clearer ahead of its planned merger with the Depository Trust and Clearing Corporation.
In a statement, the LSE says it has "a strong interest in initiatives that make post-trade more efficient, as it is an increasingly important component in the cost and quality of services provided to the market".
But it is refusing to confirm or deny it's direct involvement in the consortium, led by inter-dealer broker ICAP and eight other banks. The news first broke when Financial News reported yesterday on a document prepared by a high-level French working group under the leadership of the Banque de France, which claims that the LSE has been a member of the consortium from the outset.
The LSE inherited a post-trade clearing operation through its take-over of Borsa Italiana. The Cassa di Compensazione e Garanzia unit will act as the clearer for Baikal, the dark pool trading venue that the Exchange is setting up for pan-European stock trading.
LCH.Clearnet - which already offers clearing for the LSE in competition with sis x-clear - has a strong foothold in the OTC derivatives markets, which would prove attractive to the London bourse as it bids to extend its business into new asset classes.