Burgundy, the Nordic multilateral trading facility, has selected SIX x-clear as its alternative CCP service provider. SIX x-clear and EMCF will be the interoperable CCPs for Burgundy.
The CCP service from SIX x-clear is expected to be introduced in the second quarter 2010. However European regulators are worried that interoperability, a service that allows customers greater choice of central counterparty clearer (CCP) by linking CCPs together, may increase counterparty risk if one CCP defaults.
As a result, regulators have already put a hold on an interoperability agreement between LCH.Clearnet, x-clear, and MTF Chi-X Europe. As a result, LCH.Clearnet put out a statement on 26 October to its members saying: LCH.Clearnet Limited regrets to inform you that until regulatory non-objection has been obtained, it will not be possible to offer clearing services on an interoperable basis to any further trading venues.
An initial CCP service was introduced on Burgundy on 9 October 2009, with EMCF as service provider.
In Feburary 2009, SIX x-clear and EMCF signed an MOU underlining their drive to offer competitive clearing through interoperability.
Giles TurnerNews Editor
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