Exchange in talks with Liffe and LCH

Click to follow
The Independent Online

The London Stock Exchange has agreed to work with Liffe, the London derivatives exchange, and the London Clearing House on a series of initiatives designed to turn the LSE into the "gateway" for international securities trading.

The London Stock Exchange has agreed to work with Liffe, the London derivatives exchange, and the London Clearing House on a series of initiatives designed to turn the LSE into the "gateway" for international securities trading.

News of the initiative comes as CrestCo, the UK share settlement organisation, prepares to announce plans to slash the cost of dealing in European and United States shares.

Tariffs to be announced on Wednesday will cut the cost of settling the 300 European index stocks included in Eurotop and 5,000 shares traded on Nasdaq to the same cost as currently offered for UK traded stocks from 23 October.

The current cost of settling UK stocks in Crest is between 20p and 55p per transaction, compared with anything up to £8 for settling a European stock transaction.

With consolidation between stock exchanges having proved rather more difficult than expected earlier this year, attention has now switched to issues such as settlement and clearing, where progress is still being made on cutting cross-border costs.

CrestCo, which has repeatedly turned down merger overtures from Clearstream, its German-Luxembourg rival, is keen to demonstrate that a lot more can be achieved through multilateral co-operation than by merging with another organisation.

Paul Symons of CrestCo said yesterday: "This is not a tariff cut per se, this is merely ensuring that our current low tariffs can be extended to cover the vast majority of internationally traded stocks."

The decision by Don Cruickshank, the chairman of the London Stock Exchange, to agree to work with Brian Williamson, the chairman of Liffe, and David Hardy, the chief executive of LCH, will be welcomed by City firms which have been pressing for the most important London institutions to create a common London platform.

Among issues they have agreed should be tackled in the next few months are co-operation to promote equity options and warrants - up to now an underdeveloped market. They are also going to work together on creating greater opportunities for investors to net off positions held in different markets thereby saving on capital and reducing costs.

Comments