LCH.Clearnet’s EquityClear service has launched a major market consultation process to gather feedback on its recently established consultative Service.
Since September 2004, LCH.Clearnet has been working with a number of its members, securities exchange partners and settlement depositories to design a benchmark clearing service for cash equities. The establishment of a standardized and centralized cash equity clearing process to harmonize existing business and operational processes across LCH.Clearnet Ltd and LCH.Clearnet SA has already been identified as one of the major benefits of the merger, according to the company.
LCH.Clearnet has supplemented its own analysis with input from Operational Working Groups comprising members, the exchanges and CSDs, under the auspices of its Equity Product Advisory Group. This has helped to create a consultative Service Description that was provided in March to all EquityClear stakeholders for comment by the end of April.
Alain Pochet, Chief Operating Officer at BNP Paribas Securities Services, said “Establishing a benchmark and standardised cash equity clearing service, user designed and applicable across multiple markets, is a fundamental requirement for European capital markets if they are to achieve their twin aims of reducing the cost of capital and creating genuine cross-border efficiency. The work being undertaken by LCH.Clearnet in this field, and its consultative Service Description that is now being Press Release bc analyzed by market users, is a major step forward and a valuable contribution to the debate.”
Guy Simpkin, Director, EquityClear, commented: “The functional model must be combined with both open and independent governance and a compelling business model if it is to develop the gravitational mass required to attract further markets, support exchange level growth ambitions and competition and minimise costs to our users. We can and will achieve this but we have much to do for this to become a reality.”
The next stage will be the review of the market stakeholder feedback and commensurate analysis to derive a thorough cost/benefit analysis of the impact of the development on the market.