Bats Europe has launched a 'preferred interoperable' clearing service, enabling traders to choose between three CCPs.
Bats is the first European platform to offer its members a choice, letting them pick between EuroCCP, LCH.Clearnet and SIX x-clear. Previously, the company had an exclusive deal with EMCF.
If participants on both sides of a trade select a CCP from the interoperable group via an online election form the executed trade will be cleared by the designated clearer. But if one of the counterparties designates EMCF, the trade will default to the incumbent clearer.
Mark Hemsley, CEO, Bats Europe, says: "We are pleased to be the first market centre to offer a multilateral interoperable clearing service that supports customer choice and encourages CCP price and service competition. Today's launch is the first step toward a fully interoperable clearing environment, which is an important one toward significantly reducing frictional post-trade costs for Europe's market participants."
Tomas Kindler, head, clearing relations, SIX x-clear, adds: "Though this has been long in coming, we are delighted at the news. It vindicates our long-held position that interoperability in the clearing space benefits all constituencies - trading participants and, on a more macro level, the industry as a whole. This particular approach to interoperability is just the beginning and is set to change the clearing landscape in Europe for the future."
The Bats move is a step towards genuine, Europe-wide interoperability between clearing houses - something that traders and operators have spent years lobbying for as a way to reduce post-trade costs.