The Financial Times reported yesterday that Deutsche Borse had abandoned its apparent insistence a day earlier on retaining its clearing services as part of a “vertical silo” running from trading (Xetra), through clearing (Eurex) to settlement (Clearstream). Instead, Deutsche Borse is reported as prepared to consider a “partial spin-out” to facilitate a merger with Euronext.
The FT report says that although Reto Francioni, who replaced Werner Seifert as CEO of Deutsche Borse last year, stressed his commitment to the efficiencies of the vertical silo, he conceded that the group could be prepared to spin out its equities clearing operations into a free-standing European operation with other providers, such as LCH.Clearnet. The FT report adds that some say the apparent concession was part of an attempt to head off a regulatory clash with the European Commission, which is thought to be hostile to the vertical silo.