Clearing What’s Next?

By: José Manuel Ortiz-Repiso, Head of Clearing & Repo Ops., SIX Apr 2024

Markets are being transformed by evolving market trends, regulation and digitalisation, and central counterparty clearing houses (CCPs) are having to respond.

SIX Clearing looks at how the industry is rising to this challenge.

The new European clearing landscape evolving and the proposed revisions to the European Market Infrastructure Regulation (EMIR) – commonly referred to as EMIR 3.0 – could prove disruptive for some financial institutions.

This is because EMIR 3.0 contains a few contentious provisions, including one that stipulates market participants must clear certain over-the-counter (OTC) derivative transactions (e.g. euro/Polish zloty denominated interest rate swaps, euro denominated credit default swaps, euro denominated short term interest rate derivatives, etc) in active accounts at EU-based CCPs.

Although there are concerns the rules could potentially trigger liquidity fragmentation in Europe, CCPs - including SIX Clearing - are in a strong position to support the market’s needs. SIX Clearing, which has a presence inside the EU - through its Spanish CCP – is strengthening its existing interest rate swap clearing capabilities, making it an attractive option for firms looking to clear their euro denominated interest rate swaps.

The emergence of new digital assets is forcing the clearing model to have a re-think. With investors seeking out new and uncorrelated returns and better risk diversification, many are now repositioning their portfolios away from traditional equities and fixed income towards digital assets, such as cryptocurrencies and tokenised assets.

If institutions are to embrace this market more widely, then the service providers facilitating the issuance, trading, custody, clearing and settlement of digital assets will need to be of much higher calibre. In short, institutional allocators will only trade digital assets if their activities are supported by regulated incumbent institutions, such as exchanges, CSDs, CCPs and global custodians.

By providing clearing solutions for digital assets, CCPs can help mitigate some of these risks, in what could encourage greater institutional investor participation in the market.

In 2023, SIX Clearing, though its Spanish CCP, obtained approval from the Spanish regulator to clear Bitcoin and Ethereum futures, denominated in USD under its new Digital Assets Derivatives Segment.

Regarding European cash equity markets, it was also announced a few days ago that SIX Clearing has started providing clearing services to ARTEX Stock Exchange, a regulated art exchange that enables people to invest and trade tokenised art shares. 

But the most relevant topic expected to dominate 2024 is the debate about interoperability versus preferred clearing and preferred interoperable clearing.

As regulation and digitalisation continue to reshape markets, those CCPs that provide multi-asset class coverage will be the ones that flourish moving forward. In particular, providers that seamlessly adapt to clients’ requirements and digital transformations will continue to win wallet share.

SIX Group has a long track record of innovation, and it is driving change in the digital asset world. This puts the CCP in an excellent position to make a meaningful difference, by institutionalising the digital asset market.

In conclusion: the future looks diversified and our role as a regulated market is to build that future by providing trust, innovation, quality and security.


The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.