Clearnet upgrades systems amid competition

* Clearnet upgrades to be more responsive

* The French firm cuts fees in January

* Europe’s incumbent clearers under pressure

By Luke Jeffs

LONDON, Dec 6 (BestGrowthStock) – Clearing house LCH.Clearnet SA
completed a major systems upgrade to enable it to handle more
trades, it said on Monday, in the latest sign of growing
competition between Europe’s main clearing providers.

The French arm of LCH.Clearnet said the upgrade had already
benefited clients because the cost savings it will derive from
the change enabled it to cut fees to a fixed rate of 5 euro
cents (6.6 U.S. cents) from a floating rate in January this
year.

LCH.Clearnet, which clears trades for NYSE Euronext (NYX.N: )
out of Paris and the London Stock Exchange (LSE.L: ) from its UK
base, acts as a central counterparty to trades conducted on
these markets, ensuring members are protected in the event of a
default by a trading counterparty.

Europe’s main stock markets and clearing houses used to have
quasi-monopolies in their national stocks, but these business
models have come under pressure in the past three years with the
advent of cheaper, tech-savvy alternatives.
Trading platforms, such as Bats Europe and Chi-X Europe, and
clearers, like EuroCCP and EMCF, have forced Europe’s incumbents
to invest in their systems to lower costs and cut fees.

UK-based LCH.Clearnet Ltd in October introduced free
clearing for members generating more than 150,000 trades a day,
in the latest of its fee cuts over the past three year.

That change was welcomed by the LSE, whose competitiveness
is partly determined by the cost of clearing through its main
clearing vendor LCH.

“In combination with our own ongoing tariff cuts, this move
will further reduce the overall cost of trading for our major
clients and make the service more compelling,” said Kevin Milne,
the LSE’s head of post-trade, in an emailed statement.

LCH.Clearnet SA has replaced a system originally implemented
in 2001 with a Linux-based platform developed in conjunction
with Atos Worldline, part of IT consultant Atos Origin
(ATOS.PA: ).
(Editing by David Holmes)
($1=.7541 Euro)

Clearnet upgrades systems amid competition