The UK, Dutch and Swiss regulators contacted their local clearers: the London-based houses LCH.Clearnet and EuroCCP; the Swiss clearer SIX X-clear; and the Netherlands-based European Multilateral Clearing Facility, saying that they agreed in principle to a so-called interoperability arrangement proposed by the firms in August. The regulators described the linking model proposed by the clearers as “conceptually sound”, although they also said that there were further issues that needed to be addressed before they could give the green light on the process.

Wayne Eagle, head of the cash equities business at LCH.Clearnet said the agreement marked “one of the most significant steps forward in the process”, although others in the sector have expressed concern at what is effectively another delay on achieving interoperability. A number of people in the industry said that the expectation is interoperability might not go live until the second quarter of next year.”

In August, the clearing houses re-submitted a detailed plan that addressed these concerns and were hoping for an agreement on this revised model last month. However, regulators postponed an announcement at the eleventh hour with worries understood to centre on risk-management issues.