TRADING 2 CLEARING WORKING GROUP ISSUES BEST PRACTICE PROPOSALS

Posted July 2, 2009

LA HULPE, Belgium -- The Trading 2 Clearing (Trade2Clear) working group, comprising a number of leading trading and clearing venues and co-ordinated by SWIFT, has issued best practice proposals to enable market infrastructures to develop new links in a standard manner.

The new market practice allows for the reuse of functionality across multiple infrastructures and markets, as well as promoting standardization, interoperability and greater operational efficiencies – efficiencies trading venues can pass on to their customers. Either Financial Information eXchange (FIX) or ISO 15022 syntaxes can be used for the standardized communication, and the proposed solution is completely network-neutral.

“Chi-X Europe fully supports the efforts by SWIFT to encourage industry collaboration towards common standards for market infrastructures,” says Hirander Misra, Chief Operating Officer of Chi-X Europe. “We have been actively engaging with the CCPs to encourage greater interoperability in favor of providing greater choice for our trading participants, and will continue to support community initiatives such as these.”

The working group is comprised of trading venues Burgundy, Chi-X Europe, Equiduct, London Stock Exchange, Nasdaq OMX Europe and Turquoise, along with clearing venue and related routing and netting engine providers EMCF, EuroCCP, LCH.Clearnet Group, Monte Titoli and SIX x-clear.

“This initiative led by SWIFT is fully aligned with EuroCCP’s objective to increase efficiency and reduce risks for the market,” says Trevor Spanner, Chief Operating Officer of EuroCCP. “We’re pleased that SWIFT has successfully brought together the trading and clearing communities to improve the way we work.”

The agreed market practice specifies how to create a link between a trading venue and a clearing venue, and can be applied either to create a single link, or links to multiple clearers. So far, the guidelines apply to the equities markets. There is the potential to extend them to cover fixed income and other asset classes as well.

“Significant strides have been made in interoperability this year, and the proposals the Trade2Clear group has developed are aimed at delivering and enhancing the benefits that interoperability will bring to end users,” says Adrian Farnham, Chief Operating Officer of Turquoise.