As the debate over clearing ensues, FO Week asked a number of leading market participants for their opinions and views of what they consider to be the pros and cons of each model at the centre of the discussion.
The idea behind LiffeClear is to put Liffe on the same footing
as its peers, who each have dedicated clearing arrangements
that are wholly focused on operating seamlessly with the
exchange they serve.
LiffeClear will, in that same sense, provide an exclusive
clearing service for Liffe. However, Liffe has also recognised
that there will be value in retaining LCH Clearnet as an
outsource service provider to LiffeClear, which will obviate
the need for LiffeClear to establish brand new guarantee and
For Liffe clearing members, the transition to LiffeClear should
be frictionless and they should see also significant economic
and operational benefits developing.
For Liffes shareholders, there will be the benefits of
diversifying into a new business.
For LCH Clearnet, they will be able to play a valuable role for
Liffe at the same time as continuing to provide an unaffected
service to their other customers.
As a service provider to thousands of end users across
dozens of regulatory jurisdictions, ICEs integrated
futures, OTC and clearing businesses have competed by
responding to the needs of our customers. This focus on service
has facilitated our success despite the existence of larger
competitors with established internal clearing operations.
ICEs innovations in cleared products have served to
expand the broader market, benefitting intermediaries and
customers alike. Today, the needs of the exchange and our
customers have outstripped the existing clearing capabilities,
hampering our ability to compete. End-users are increasingly
demanding additional cleared products that ICE wishes to
deliver. Weve demonstrated a commitment to leading-edge
technology, innovation and competitive markets. It is in this
spirit that ICEs clearing strategy seeks to provide
immediate benefits to end users. We intend to do this not only
through enhanced risk management systems and technology, but in
connecting directly with our global customer base and their
clearers to understand their evolving requirements within a
competitive exchange environment.
Deutsche Börse Groups integrated business
model is a very successful model. It has enabled us to be
better geared towards our customers needs than any other
exchange organisation in the world. We serve our customers
along the entire process chain of market data, trading,
clearing, settlement, custody and administration of securities,
offering one-stop information technology in all of these areas.
Synergies generated in our business model pay off and create
value for our customers worldwide and for our
stakeholders. In the past, some of our competitors criticised
Deutsche Börse Groups integrated business model, but
now more and more are imitating it.
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