NYSE Liffe to Build CCP, Severs with LCH.Clearnet

Global exchange operator NYSE Euronext announced that Liffe, its London-based derivatives market, today has given formal notice of services termination to LCH.Clearnet, the derivatives clearing services provider also based in the UK capital.

Following on an initial announcement in March, NYSE Liffe has also affirmed that, subject to regulatory approval, it will expand its own clearing service into a fully integrated and self-sufficient central counterparty (CCP), called NYSE Clearing, to be operational by the end of June 2013. The new CCP will hold responsibility for default management arrangements, risk management, collateral and treasure activities, and banking and payment systems.

The move will allow NYSE Euronext to implement new over-the-counter (OTC) clearing arrangements, as well as migrate clearing of its continental derivatives markets in Amsterdam, Brussels, Lisbon, and Paris to a centralized location in London, citing capital savings and operational efficiencies. 

The exchange operator says it remains in talks with LCH.Clearnet to partner on a long-term clearing arrangement for its regulated cash markets in Europe.