Nordic securities exchange Burgundy, which offers trading in more than 1,200 securities in Denmark, Finland, Norway and Sweden, has launched a competitive clearing service that allows customers to choose between European clearinghouses the European Multilateral Clearing (EMCF) and SIX x-clear.
A clearinghouse reduces the counterparty risk in securities trading as it enters as a legal counterpart to each trade in real-time. It monitors price risk and collects collateral from its participants until a transaction is completed.
Customers who trade on Burgundy and other European platforms offering interoperable central counterparty clearing can consolidate their flow to their preferred clearinghouse.
This will help to save capital and reduce clearing costs.
Olof Neiglick, CEO of Burgundy, said: “This is an important strategic milestone for our clients as we are the first Nordic exchange that offers choice in the increasingly important clearing landscape. In the last three years we have seen a radical transformation in the way equity trading takes place, resulting in lower transaction costs for investors.”
“Now we are taking the next step by introducing competition also for the clearing part. Deregulation and competition are the main drivers behind service improvements and price cuts in any market—this is also the case for Nordic securities trading as the industry matures.”
