SIX Group will buy Oslo Clearing from the Norwegian exchange for about 180 million kroner ($32 million) as the operator of the Zurich bourse readies to compete in the market for derivatives transactions.
SIX, barred from competing for derivatives clearing until May 2014 under a deal agreed when it sold its stake in Eurex, will buy the unit from Oslo Boers, owner of Norway’s stock exchange. The Oslo-based clearinghouse is a central counterparty for equities, derivatives and security-lending products in the region. The acquisition will close in the second quarter of 2014, Tomas Kindler, head of clearing relations at SIX Securities Services, said in a phone interview.
“We are buying scale,” Kindler said. “We have a pan- European footprint but the Nordics are a white spot, so we get access to the Nordic banks and customers with this deal. We have started to extend our product range and with this purchase we are buying an existing derivatives business with exchange and over-the-counter capability.”
European Union and U.S. regulators are pushing for tighter oversight of the $639 trillion swaps market. The EU plan would require more of the products to be traded through central clearinghouses, which are intended to lessen the fallout from a bank default by guaranteeing counterparty payment. SIX was co- owner of Eurex, Europe’s largest futures exchange, with Deutsche Boerse AG (DB1) and sold its stake in the business last year.
Eurex operates Eurex Clearing, which provides central counterparty services for derivatives, bonds, equities and the repo market. SIX owns x-clear, a venue that focuses on stocks, exchange-traded funds, bonds, structured products and warrants.
“We always said we wanted to be an active consolidator and there is obviously too much capacity” with about 25 clearinghouses in Europe at present, Kindler said. “This is additional scale in the equities space, with another 25 percent volumes on top of what we will have already.”
In addition to Eurex, exchanges including Atlanta-based Intercontinental Exchange Inc. (ICE) and Chicago-based CME Group Inc. (CME) already offer derivatives clearing. London Stock Exchange Group Plc (LSE) has agreed to buy a majority stake in LCH.Clearnet Group Ltd., the world’s largest interest-rate swaps clearinghouse, and NYSE Euronext (NYX) is planning to set up its own unit.
SIX, home to Nestle SA and UBS AG, is the largest of Europe’s bourse operators to remain closely held. It is owned by about 150 brokers and banks, including UBS and Credit Suisse Group AG, that are also users, and was formed in a three-way merger at the start of 2008.
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