NYSE Euronext’s London derivatives market, LIFFE Administration and Management (LIFFE) has now given formal notice of termination with respect to the services currently received from LCH.Clearnet Ltd under the Clearing Relationship Agreement to support NYSE Liffe Clearing, NYX’s London-based derivatives clearing service.
Subject to regulatory approval, LIFFE intends to expand NYSE Liffe Clearing to commence functioning as a fully integrated Central Counterparty (CCP) – NYSE Clearing - from the end of June 2013, including assuming responsibility for default management arrangements, risk management, collateral and treasury activities and banking and payment systems.
In March this year, NYSE Euronext announced its clearing strategy and commitment to delivering significant operational and margin efficiencies for its clients by building out NYSE Clearing as a full service derivatives clearing platform. Today’s announcement reaffirms the Exchange’s commitment to deliver a fully self-sufficient Central Counterparty from the end of June 2013.
Subject to further regulatory approval, following the start of operations of NYSE Clearing as a fully integrated CCP, NYSE Euronext intends to develop new arrangements for OTC clearing and migrate the clearing of the NYSE Liffe continental derivatives markets in Amsterdam, Brussels, Lisbon and Paris to the London based CCP. This will generate further benefits for customers in terms of capital and operational savings, and further synergies for NYX shareholders. Trading arrangements and regulatory oversight of the NYSE Liffe continental derivatives markets will remain unchanged. In addition, NYSE Euronext continues to work with LCH.Clearnet SA to establish a new long term clearing arrangement for its European regulated cash markets.