SIX x-clear Ltd – Going from strength to strength

SIX x-clear Ltd – Going from strength to strength

The clearing arm of SIX Securities Services, SIX x-clear Ltd, has come a long way. Since its creation in 2003 much has been achieved by the team led by CEO Urs Wieland. While client base and trading-venues served have become increasingly international, the real international breakthrough took place this year – with the approval of the new CCP interoperability framework in Europe.

Interoperability – a long-term endeavor

For the past two years, SIX x-clear Ltd had been engaged in discussions with the FSA, the UK’s regulatory body and Swiss regulators, the Swiss National Bank and FINMA, to agree an updated interoperability agreement and to address all concerns raised by controlling authorities.

The main concerns revolved around the framework for inter-CCP risk and how it should be managed in order to allow multiple clearing providers to offer their services to the same trading platforms. In May of this year, regulators finally gave their green light to extending interoperability beyond the existing stock exchanges, London Stock Exchange and SIX Swiss Exchange, allowing European markets to finally benefit from greater choice of providers. Long term, this increased competition will lead to lower costs, greater transparency and ideally, higher service quality for all clients.

Well positioned and winning

SIX x-clear Ltd has always been an advocate for open markets and increased competition and is well positioned to succeed in this new environment. Its service offering already covers 8 regulated exchanges and MTFs, offering clearing services and, together with SIX SIS Ltd
(a SIX Securities Services company), integrated collateral management for cash products (equities, ETFs and bonds), securities lending transactions and CO2 certificates.

Since the implementation of the interoperability framework, the clearing arm of
SIX Securities Services has been highly successful and reported various client wins: In August, two major global banks transferred their LSE clearing business. With these new accounts, SIX x-clear Ltd’s market share at the London stock exchange increased by 100% to a total of 27 percent.

In addition, SIX x-clear has become one of two CCPs processing interoperable trades on BATS with UBS as a first client. With UBS MTF another trading venue has launched clearing interoperability further fueling the strong increase of volume experienced in the first half of 2011.

Within the first half of 2012, SIX x-clear Ltd will start clearing for 4 further trading venues – Chi-X, Turquoise, NASDAQ OMX and Burgundy. As a result, access to European on-exchange cash equities clearing volume will increase from currently 15 percent to approx. 60 percent of total volume. Tapping this huge potential, SIX x-clear Ltd is targeting volume growth of 80 percent in 2012, up from 20% in 2011.

Urs Wieland, CEO of SIX x-clear Ltd commented: “It has been a great year for us. The signing of the interoperability agreement was a quantum leap that has enabled us to finally compete and offer our services across Europe.”

Tomas Kindler, Head of Clearing Relations added: “ We are very proud to announce these client wins. It is the result of very hard work and I would like to take this opportunity to thank everyone involved in making this happen.”