Author: Peter Cox

Bourse Consult report first deliverable in City of London RMB initiative

The UK Chancellor of the Exchequer joined leading City institutions today (18 April) at the Gherkin, 30 St Mary Axe, to launch a new initiative designed to strengthen London’s position as the leading western hub for international renminbi (RMB) business

Posted in Bourse Consult Announcement, Capital Markets, Public Sector Tagged with: , , ,

LSE outage and change of plan begs more questions

The outage on Tuesday 2nd November of London Stock Exchange’s new Millennium Exchange system at its Turquoise MTF (see FT articles here and here) has elements of the mystery thriller about it. LSE’s announcement that “human error” which ”may have occurred in suspicious circumstances” was to blame has intrigued us all but there are other open questions to ponder.

Posted in Exchange & Trading Systems, Exchanges, Information Technology, Operations & Operational Efficiency Tagged with: , , ,

The European Market in US Shares

Both the Turquoise and NYSE Arca Europe MTFs have announced new markets in US shares during European hours. Will these ventures work when attempts in the past have been unsuccessful?

Well perhaps. But liquidity on the MTFs could be thin until New York opens.

A further question is whether the clearing service offered by EuroCCP is enough for traders to regard the European MTFs as part of the same trading space as the US. Or is it necessary to go a step further and make European trading fully fungible with US trading through a single clearing process?

Posted in CCP, Clearing & Settlement, Exchanges Tagged with: , , , , ,

European Regulation of Clearing Houses

Jeremy Grant’s article in today’s Financial Times reports on the House of Lords’ view that European clearing houses should not be regulated by a EU authority since the EU would not be able to bail out a clearing house if

Posted in Clearing & Settlement, Rules & Regulation Tagged with: ,

Exchange Traded and Cleared vs Bilateral OTC – is it really so black and white?

Since the financial crisis much thought has gone into how the administration and risk management of OTC derivatives could be improved. Most of the discourse gives the impression that there are only two choices – either the current arrangement, with administration carried out bilaterally between the trading parties or clearing through a multilateral netting central counterparty.

But are the choices really that stark? Are there not additional solutions which would go a long way towards meeting the regulators ultimate objectives but also allow a wider range of OTC contracts to be included?

A centrally administered bilateral clearing arrangement could be such a solution.

Posted in CCP, Clearing & Settlement Tagged with: ,