LCH.Clearnet SA (LCH.Clearnet) will provide clearing services to Galaxy, the Multilateral Trading Facility (MTF) owned and operated by TradingScreen and certified by the Cassiopeia Committee for the provision of clearing services for euro-denominated bonds, from its launch in June 2011, subject to regulatory approval.
The Cassiopeia Committee is a Paris based organisation, formed in 2010, and focused on the euro-denominated corporate bond market. It seeks to explore ways of introducing secondary corporate bond platforms in Europe and address market demands to improve transparency, liquidity, post-trade services and reporting.
LCH.Clearnet will deliver an automated and fully integrated solution from trading through clearing to settlement. The settlement instructions will be processed through the major International Central Securities Depositories (ICSDs) and European national Central Securities Depositories (CSDs), and the service’s use of existing connectivity will facilitate implementation and adoption by clients and enable them to clear a new asset class, using their current arrangements.
Commenting on the initiative, Christophe Hémon, Chief Executive of LCH.Clearnet SA, said: “We have worked closely with Galaxy to provide our expertise to the Cassiopeia initiative to enhance transparency and certainty in the euro-denominated bonds markets, in line with regulators’ aims to reduce systemic risk by bringing more OTC products into clearing. This offering complements LCH.Clearnet’s clearing arrangements with Cassiopeia MTFs for corporate bonds and further reduces risk in the euro-denominated bond markets.”
Jean-Philippe Malé, Chief Executive Officer of Galaxy, added: “As one of the leading financial technology provider to financial markets, we are delighted to bring our know how to this European initiative and to work with LCH.Clearnet SA to bring to our buy-side and sell-side clients the capability to centralise their clearing with a well established clearing house. By working together with LCH.Clearnet we will deliver a completely integrated, highly efficient workflow from low latency price distribution, electronic execution and position monitoring to risk free clearing and settlement straight through processing that is not currently available for OTC transactions.”