Now in its 40th year, WFE Clear 2024 will descend on the Bolsa de Madrid, Spain, in just over a month’s time. We are all set to welcome the audience and speakers to this event where we will be taking the pulse of the sector and debating relevant issues. SIX, which includes BME, is proud to be hosting the three-day event, which will bring together industry leaders to discuss some of the biggest issues facing the world of centralised clearing and derivatives.
This sort of dialogue helps facilitate best practices, something which SIX continuously tries to promote. We live in times of constant change in which it is important to listen to all the relevant actors in the sector and to learn about their priorities, plans and challenges. For financial market infrastructures, such events are essential, because one of our priorities is to listen to our clients' needs and serve them properly.
In addition to its strong footprints in both the Swiss and Spanish markets, SIX is an international business supporting the bespoke needs of global financial institutions, by providing settlement, custody and clearing services.
We offer a highly diversified CCP with access to multiple trading platforms across Europe. We also clear a wide range of instruments, including interest rate swaps, financial derivatives with equity index, single stocks and rolling spot futures, energy derivatives, repo and buy-sell backs, cash equities, Swiss fixed income and derivatives on digital asset indexes.
CCPs have spotted a commercial opportunity to clear more products following the emergence of new digital asset classes – such as crypto-currencies and security tokens – and recent regulatory changes, namely the US Securities and Exchange Commission’s (SEC) decision to approve a spot bitcoin exchange traded fund (ETF) in January.
SIX, for instance, now has the capabilities to clear crypto-currency exchange traded products, and will be extending the offering to crypto derivatives. Should the digital asset market keep growing, it could become an attractive revenue stream for CCPs. In this context of the boom in digital assets, the security, reliability and transparency offered by regulated markets is an essential factor of confidence, something that is highly demanded by investors.
The clearing industry is also being transformed by regulation.
Revisions to the European Market Infrastructure Regulation (EMIR) will require EU financial and non-financial counterparties to have active accounts at EU CCPs, along with minimum clearing quotas at EU CCPs for certain euro denominated OTC derivatives.
Given that 90% of euro-denominated interest rate swaps (IRS) are currently being cleared at a single UK CCP, the EU, in light of Brexit, felt this was a systemic risk, so has been agitating for more IRS clearing to be brought onshore.
SIX extensive experience of clearing IRS puts it in an excellent position to capitalise on these EU-wide changes. BME Clearing, our Spanish CCP, has a proven track record in clearing this type of asset. Until now, with a more local focus in Spain, but now we have the international presence of the SIX Group.
Clearing is facing some profound challenges, but there are also plenty of opportunities as well. WFE Clear 2024 is an excellent networking forum for the industry to gather together to learn about these very issues.
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.