NASDAQ OMX Nordic is planning to introduce competitive central counterparty clearing on the equity markets from April 20, 2012, subject to necessary regulatory approvals or consents. Starting from that date, members of NASDAQ OMX Nordic may choose their CCP service provider from EMCF, EuroCCP and SIX x-clear.
Current CCP eligible instruments consist of equities and ETFs traded on the NASDAQ OMX exchanges in Copenhagen, Helsinki and Stockholm, as well as Norwegian equities traded on First North Stockholm. Equities are approved by all relevant regulatory bodies for inclusion in current interoperability regime, whereas ETFs are under ongoing regulatory review. It is possible that the competitive clearing instrument scope may not cover ETFs for all CCPs at NASDAQ OMX Nordic. To allow for any outcome in relation to ETFs, NASDAQ OMX Nordic will extend the multiple CCP functionality in INET Nordic trading system.
This extension has no impact on the trading protocols, but will result in some changes in reference data distributed via the TIP protocol in Genium Consolidated Feed.
Current functionality
INET Nordic supports competitive clearing with multiple CCPs. The functionality is built on
- member level in order to register the CCP chosen by the MPID for each of the MIC codes of Nordic exchanges
- order book level to identify whether instrument is CCP eligible (or not)
- each CCP must be able to clear all CCP eligible order books.
Future functionality
Each order book in INET will define the CCPs that are available for that order book. This information will be distributed through Genium Consolidated Feed as part of basic data, cf. below.
Where all regulatory bodies approve ETFs for interoperability, we will have full interoperability, and equities as well as ETFs will be cleared by the member’s chosen CCP.
If all regulatory bodies do not approve ETFs for interoperability, a member will only be able to clear ETFs through his chosen CCP on condition that the CCP has received the necessary approval. Where that is not the case, the member must have a clearing arrangement with one of the CCPs registered on the relevant ETF order book.
If a member sends an order for an ETF, and there is no applicable CCP registration on the member’s MPID in INET, the order will be rejected.
There is no change in trade confirmation: the CCP is relayed as the counter party in the private execution reports.
Example
Symbol: 123, Cleared by CCPB
Member: A Primary CCP: CCPA, Secondary: CCPB
Member: B Primary CCP: CCPB, Secondary: CCPA
Member A trades with Member B.
Member A trade leg cannot be sent to CCPA, and is therefore sent to CCPB.
Member B trade leg can be cleared by CCPB, and is therefore sent to CCPB.
Limitations
- The choice of a CCP is entirely based on reference data. A member cannot choose CCP on a per order basis.
- The order in which the member’s CCPs are defined is static per exchange. It cannot be expanded to various types of securities (e.g. choose CCPA first for equity, but CCPB for ETFs within the same exchange).
- Sponsored access clients cannot deviate from the sponsoring member’s choice of CCP.
Changes in basic data fields in Genium Consolidated Feed
An initial draft version of TIP 2.4.2 specification and a TIP changes document are available on Genium Consolidated Feed web page. The final TIP 2.4.2 version specification will be published in the beginning of week 7.
- Field “IsCCPCleared” will be removed
- New field “CCPList” will be added
Testing
- Extended CCP functionality will be available for testing and verification in OTF as of March 19, 2012.
- TIP 2.4.2 will be available for testing of the removed and added basic data fields in GCF4 as of March 19, 2012.
Planned dates for production
- Extended CCP functionality will be in INET PROD as of Friday, April 20, 2012.
- TIP 2.4.2 release will be in GCF PROD as of Monday, April 23, 2012.
Please note the reference data is not available until the business day after launch of competitive clearing.
For further information concerning this exchange notice please contact Technical Support,
tel. +46 8 405 6410.
Best regards
NASDAQ OMX Nordic
