From June 2019, Oslo Børs will exit the linked order book partnership with the London Stock Exchange Derivatives Markets (LSEDM). Oslo Børs will continue to operate the market, using the same trading system delivered by the London Stock Exchange (LSE).
Oslo Børs members will be able to continue trading derivatives with no changes to their trading or clearing setup. LSEDM members will need to sign a membership agreement with Oslo Børs, and a clearing agreement with SIX x-clear to continue trading Oslo Børs derivatives.
On the trading side, there will only be minor connectivity changes for new members. On the clearing side, to ease the migration of international clearing members, SIX x-clear is committed to launching a new FIXML-based Application Programming Interface (API) in Q2 2019.
Lower Clearing Margin Costs
Since the introduction of the European Market Infrastructure Regulation (EMIR), the current model of two interoperable clearing houses has required an additional margin to balance the risk between the two clearing houses. This additional cost will cease in June 2019, and members will see lowered clearing margin costs as a direct result.
The Oslo Børs – LSEDM order book today holds a 95% market share in exchange-traded Norwegian equity derivatives, with an average of 25% tighter spreads than competing markets. With the majority of the market share, and 6 out of 7 market makers already connected through Oslo Børs, we are confident that Oslo Børs will remain the venue of choice for Norwegian equity derivatives.
About the LSEDM Partnership
Since 2009, Oslo Børs has operated a linked order book partnership with LSEDM for Norwegian equity derivatives. Members of both stock exchanges have been able to access Oslo Børs’ instruments through a common order book, with clearing through SIX x-clear for Oslo Børs members, and the London Clearing House (LCH) for LSEDM members.
From June 2019, LSEDM and LCH will exit the partnership, and Oslo Børs will continue to operate the market, using the same trading system delivered by LSE, but clearing will be done through SIX x-clear in its entirety.
LSEDM members will have full access to trade Oslo Børs derivatives in the transition period, which will last until close of business on 21 June 2019. LSEDM and LCH are committed to working with Oslo Børs and SIX x-clear to ensure an efficient migration of their members during this period.
For more information, please contact:
Head Trading Derivatives, Oslo Børs
Jesper von Zweigbergk
Head Derivatives, Oslo Børs
Norwegian Country Head, SIX x-clear