Nasdaq OMX, the US-based exchanges operator, has confirmed it has made a bid for a minority stake in LCH.Clearnet, operator of the world's largest swaps clearing house.
The approach has highlighted a hotly-disputed debate among operators of the world's financial markets over how the industry should be organised in the wake of sweeping regulation. It also gives the first indications of Nasdaq OMX's strategy after a failed attempt – together with IntercontinentalExchange – to break up the proposed NYSE Euronext-Deutsche Börse deal in May. Authorities in Washington and Brussels are insisting that privately-negotiated over-the-counter derivatives be traded on exchanges and other new platforms and be processed at clearing houses to help reduce risk in the system.
Speaking at an industry conference, Robert Greifeld, chief executive of Nasdaq, noted that the industry was increasingly moving towards a model where an exchange controls the trading of equities and derivatives, as well as clearing. "We understand the financial motive for clearing but we hope there is an opportunity for a more open and competitive model”, he told the annual Federation of European Stock Exchanges.
He said LCH's flagship SwapClear interest rate clearing service could dovetail with the International Derivatives Clearing Group, LLC (IDCG), a majority-owned but independently-operated unit of Nasdaq. "IDCG would be a natural corollary to SwapClear”, he commented.
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