CCP as an opportunity to develop capital markets

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Central clearing is becoming increasingly an integral part of financial systems in developed capital markets. All Western European and select CEE economies have adopted CCPs which are in compliance with EU regulation. For smaller capital markets and exchanges the introduction of a CCP poses challenges organisationally, financially and in terms of its impact on today’s and future business potential in trading and membership. Through market and desk research and interviews with both trading houses and exchanges this study sheds light on the expected impact a CCP will have on membership and trading. It appears that the introduction of a CCP has the potential to unlock access to international trading activity and provide developing capital markets a chance to establish both a more modern market infrastructure and increase both liquidity and access to capital to fuel the financing of future growth. The introduction of a CCP alone however is merely a prerequisite which needs to be complemented with a holistic approach in strategically align with the needs of international and local members to facilitate increased liquidity. This involves an assessment of the entire trading process and value chain as well as the combined fee and cost structure of the entities involved. The Vienna based CEESEG group includes two exchanges and a shareholding in CCP.A. As a group it is well positioned to provide to smaller capital markets a combined infrastructure offering including the CCP functionality and a state of the art trading technology.