By Huw Jones and Jane Baird
LONDON, Feb 12 (Reuters) – British, Dutch and Swiss market watchdogs have agreed conditions to end a ban on clearing linkages, which could spur competition and cut fees in Europe’s stock market, industry officials said on Friday.
Share trading platforms like Chi-X and BATS want clearing houses to share markets, so that these venues can offer multiple clearers and strengthen their ability to compete with exchanges such as Deutsche Boerse and NYSE Euronext by bringing down transaction fees.
The worst financial crisis since the 1930s prompted regulators to slam the brakes on a string of applications from clearers to hook up with one another.
Now clearers will have to take another look at their requests for market-sharing, known as interoperability, to meet the conditions agreed on Friday by the regulators, which will delay the introduction of linkages in the market.
Regulators wanted to be sure they had a full picture of risks posed by linkages to the broader financial system. They feared links would see a bust clearing house spread contagion throughout the broader financial system.