NYFIX, a provider of innovative solutions that optimize trading efficiency, and SIX x-clear, the Central Counterparty (CCP) and licensed Swiss bank formerly known as SIS x-clear, today are entering into a partnership to develop a CCP solution for the NYFIX Euro Millennium dark pool. The solution is expected to be available by the end of 2008. "Recent events have justified the need for CCPs in an increasingly automated world. NYFIX Euro Millennium is enhancing its offering by making the smart choice of SIX x-clear, a CCP with a proven track record of delivering robust risk management and competitive post-trade costs," said Tim Wildenberg, head of direct execution services Europe at UBS Investment Bank, and a Euro Millennium client, in press release.
The partnership between NYFIX and SIX x-clear will further expand the post-trade facilities of Euro Millennium and will be offered in conjunction with BNP Paribas, which already works closely with NYFIX in offering post-trade services. SIX x-clear will enable clients to execute in one of Europe's leading dark pools of liquidity and then settle efficiently and effectively against the central counterparty. This solution will further reduce post-trade costs and risks by providing a netting service and a real-time risk management system to ensure that all positions are continuously monitored and assessed. The netting service will create a single trade for settlement that combines all of the trades that have been done with a given counterparty for a particular International Securities Indentifying Number (ISIN). Settlement for each security will be in the principal place of settlement liquidity for the stock, allowing the interchangeability of settlement between Euro Millennium and other exchanges and MTFs.
"Today's announcement about our plan to partner with SIX x-clear marks a significant milestone in the growth and development of Euro Millennium," said Chris Smith, director, NYFIX International, in the release. "We are very pleased to be able to partner with a company that holds the same vision for efficient, cost-effective pan-European equity trade settlement. Since its launch earlier this year, we have seen liquidity grow dramatically in Euro Millennium and we have been working with our clients to ensure that dark trading delivers significant benefits, including price improvement and reduced market impact. One of the most important aspects in selecting SIX x-clear as our partner was the ability to ensure that mid and small-cap stocks traded on Euro Millennium could be settled as effectively as the most liquid large-cap stocks," he added.