Instinet Chi-X Limited, a pan-European equity alternative trading system (ATS), has successfully traded, cleared and settled the component stocks of the AEX 25 (Dutch) and DAX 30 (German) indices with the help of Fortis’ European Multilateral Clearing Facility (EMCF) entity, a non-exclusive partner.
With this phase of the Chi-X rollout in place, the integrated system is now the first to offer trading and clearing services that completely bypass Europe’s existing exchanges and central counterparty infrastructure.
Chi-X will begin trading the component stocks of the FTSE 100 index by the end of Q2. The other major European markets will be introduced ahead of MiFID later this year. Chi-X has been in live beta production since November 2006, during this time successfully executing trades from Instinet’s client order flow.
“Chi-X is a completely open and MiFID-compliant trading platform, allowing institutional and private client investors to access it through any broker that connects to Chi-X and becomes an accredited partner,” said Tony Mackay, managing director of Instinet Chi-X Limited. “We strive to provide market participants with an attractive alternative to trading on the incumbent exchanges, and it is also our intention to make offers of equity ownership to selected participants.”
Jan Bart de Boer, global director of brokerage, clearing and custody at Fortis, added: “Going live with Chi-X is a landmark moment for us, and we look forward to soon offering our central counterparty services to more European markets. We believe we will see a number of MTF initiatives in Europe with MiFID as a catalyst, and have created the ‘European Multilateral Clearing Facility’ (EMCF) to offer such MTFs an efficient and cost-effective pan-European central counterparty. Our clients have been asking for this, and to date the incumbents have been either unwilling or unable to provide such a service, so we jumped in.”
In other news, Credit Suisse’s Advanced Execution Services (AES) trading desk has successfully begun routing orders to Chi-X.
“We are thrilled to offer our clients the opportunities that a radical new service like Chi-X presents,” said Richard Balarkas, managing director and head of AES sales at Credit Suisse. “We are confident that increased competition between exchanges and other venues will deliver improved execution performance and, ultimately, returns to our clients.”
Additionally, as part of Chi-X’s open access and non-exclusive model, BNP Paribas Securities Services has been approved as a “general clearing participant.” BNP Paribas’s participation will offer trading participants a choice of access provider and at competitive prices.
“It was a natural move for us to be involved in Chi-X,” said Patrick Colle, head of product for clearing, settlement and custody at BNP Paribas Securities Services. “It is a sign of our commitment to be the leading provider of clearing services for any trading venues, and it also enables our clients to take advantage of new trading opportunities resulting from MiFID.”
BNP Paribas’ general clearing membership for Chi-X will cover several European markets, starting with Netherlands, Germany and the United Kingdom, it said in a release.