Dynamic best execution policies will soon be the norm, according to Dr Anthony Kirby, director of financial services advisory at Ernst & Young and chair of the Best Execution Subject Group (BESG). However, without a better settlement and clearing solution, the cost savings from best execution will not be fully realised, he warns.

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US market operator IntercontinentalExchange (ICE) has received regulatory approval to establish its own clearing operation in London, which will be dubbed ICE Clear Europe. It has been granted permission to operate in the UK by the UK Financial Services Authority (FSA), following HM Treasury approval and an Office of Fair Trading (OFT) review. ICE Clear Europe is expected to commence operations in July 2008.

Nasdaq OMX Group has selected European Multilateral Clearing Facility (EMCF), a wholly owned Fortis subsidiary, to deliver clearing services for the Nasdaq OMX Pan European Market (MiFID Monitor, March 2008). Settlement will be handled domestically on the Pan-European Market. All trades will settle in the underlying domestic settlement system and accordingly will have settlement fungibility with trades on the primary market.

The pan-European MTF being established by Nyse Euronext in partnership with HSBC and BNP Paribas, Smartpool, has selected EuroCCP and LCH.Clearnet to provide its clearing and settlement services. Both EuroCCP and LCH.Clearnet will support trading of European stocks offered on the London-based electronic block trading platform.

European Central Counterparty (EuroCCP) – the DTCC-owned clearing and settlement subsidiary that will provide services to Turquoise (MiFID Monitor, April 2007) – has received approval as a UK Recognised Clearing House (RCH) by the Financial Services Authority (FSA).

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As MiFID Monitor went to press, the London Stock Exchange unveiled plans to leverage its Italian assets and introduce in the UK a post-trade router to facilitate competition between clearing services.

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