|
|
Under the silo model, an exchange prevents third-party trading platforms from accessing its clearinghouse, making it difficult for upstart derivatives platforms to gain a foothold. The developments are piling the pressure on Europe’s existing exchange silos, not least on Deutsche Börse’s Eurex Clearing, the biggest derivatives clearing silo in Europe, which is in the process of merging with transatlantic NYSE Euronext.
The deal, which is being investigated by the European Commissioner for Competition, has been slammed by opponents who fear it would create a formidable trading and clearing silo that would dominate more than 90 per cent of trading in Europe. The MiFID proposal has been devised to plug the gaps that have emerged in the European market infrastructure regulation, Europe’s key piece of derivatives reform, which has been subject to heavy negotiations in Brussels and is likely to come into force by late next year.
Full article (FN subscription required)