In January 2012 Bats Europe (Bats) launched full four-way* clearing interoperability, offering Participants true "user choice" in selecting their Central Counterparty (CCP).
This development will allow Clearing Participants to choose a single CCP for activity relating to any given market segment for a variety of different trading venues, removing the need to fund cross margin arrangements across different CCPs. This should lower Participants' overall trading costs and enable them to manage risk more effectively and efficiently.
The CCPs offering clearing services on the Bats market are European Central Counter Party NV (EuroCCP), LCH.Clearnet Ltd and SIX x-clear AG. The interoperable group covers all pan-European markets with the exception of Spain.
Participants will need to maintain clearing arrangements with any relevant CCP. Where a transaction occurs between two Participants, each leg of the transaction will be sent to the Participant’s respective Interoperable CCP of choice. Clearing arrangements, either directly or via a General Clearing Participant (GCP), must be in place prior to trading.
* Since the merger of EMCF and EuroCCP Ltd, Bats supports three-way interoperability.