LSEG Banks on Open Access


London Stock Exchange Group knows that real success is not measured by how well one performs but also how one plays with others.

The global stock exchange operator, and winner of the 2017 Markets Choice Award for Best Global Exchange Group, has spent the past eight years implementing open access across its business lines globally.

Ali Hackett, LCH

“Ever since Xavier Rolet came here, he thought very early on that open access allows us to partner even with our competitors,” said Ali Hackett, global head of sales and relationship management at LCH and US country head at LSEG. “So for example, having the FTSE Russell indexes at the CBOE and CME. Does it make them partners, competitors, or both?”

The LCH also cleared for Nasdaq NLX until Nasdaq decided to shutter the business earlier this year, she added. “Open access is in our DNA.”

From a fixed-income perspective, LSEG’s MTS BondsPro business was the first unaffiliated electronic trading platform to offer direct trading in US and non-US corporate bonds via Bloomberg’s TSOX execution management system for fixed income.

Since the linkage’s launch in June 2016, MTS BondsPro has gained 30 new clients and 60 users, according to LSEG officials.

However, open access is not limited to LSEG’s trading businesses. “Think of us as pre-trade,” noted Hackett. “Think of as trade. Think of us as post-trade and everything in between.”

In the post-trade business, LCH offers clients linkages from a range of exchanges, trading platforms, and over-the-counter markets.

And in 2016, its SwapClear business cleared approximately 95% of the cleared interest rates derivatives traded. The clearinghouse also has incorporated open access into its SwapAgent offering that provides processing, managing, and settlement functions, except for default management, to the non-cleared market and is set to launch later this quarter.

“We continue to support clearing even in the bilateral space with SwapAgent, which does the valuations and acts as the calculation agent to eliminate valuation disputes,” she explained.

Given the LSEG’s history of open access, Hackett sees no difficulty in meeting MiFID II’s mandated open access requirements that go into effect on January 3, 2018. “We will be ready,” she said.

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