Instinet, a global agency broker, and Fortis have signed a Memorandum of Understanding under which Fortis is cooperating with Instinet to develop clearing and settlement services for Instinet Chi-X Limited, Instinet’s new pan-European MTF (Multi-Lateral Trading Facility)/ATS (Alternative Trading System) set to begin trading later this year.
The deal aims to enable institutions to pay significantly lower trade clearing and settlement fees on Chi-X than they are currently charged by the major European clearing houses and custodians.
“The total cost of trading equities in Europe is significantly higher than other major markets competing for investor capital,” says Peter Randall, the Director of Instinet Chi-X Limited. “Europe needs competition, not consolidation as this leads to innovation, more liquidity and lower costs. Chi-X will provide institutions with a true high speed, low-cost alternative for trading European equities, and our partnership with Fortis, which provides compression, netting and significantly lower clearing and settlement costs, will ensure competition throughout the entire equities trading process.”
“Fortis is one of the largest independent, third-party clearers in Europe, Asia/Pacific and the U.S., offering clearing services for the derivatives, equities, bonds and commodities markets,” adds Jan Bart de Boer, the Global Director of Commerce of Merchant Banking Brokerage, Clearing & Custody at Fortis. “We have General Clearing Memberships at over 40 exchanges and access to other major exchanges through third-party relationships. With today’s emphasis on efficiency and cost control, we are pleased to announce our cooperation with Instinet to develop clearing services over our network with proven speed, reliability and performance. The benefits to clients are obvious.”
The Chi-X market model also allows for interoperability with other providers of central market infrastructure, be they central counterparties (CCPs) or central securities depositories (CSDs).