NASDAQ OMX Nordic, part of The NASDAQ OMX Group Inc. (NASDAQ:NDAQ), today announces that they will postpone the introduction of competitive clearing in the Nordic cash equity markets, beyond the targeted April 2012 timeline, as announced in October 2011.
Hans-Ole Jochumsen, President of NASDAQ OMX Nordic said: “NASDAQ OMX has strived to pursue a competitive cash clearing model since 2009, when we first announced our intent. We are convinced that it will act to drive liquidity and lower investor costs, thus benefiting our clients and the European capital market as a whole. However, there is still uncertainty regarding the detailed requirements for interoperability even though there is a political agreement regarding EMIR. There needs to be clarity and a level playing field in this area, before we can introduce interoperability.”
The principle on interoperability for cash equities in EMIR, the European Markets Infrastructure Regulation, have been agreed on a political level, but there are still issues outstanding. ESMA, the European Securities and Markets Authority, will draft technical standards, in cooperation with ESCB, European System of Central Banks, by 31 December 2012.
Work is also on-going to update the recommendations from CPSS-IOSCO, the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions i.e. “CPSS-IOSCO principles for financial market infrastructures”. When finalized, the new principles will replace the three existing sets of CPSS and CPSS-IOSCO standards, the Core principles for systemically important payment systems (2001); the Recommendations for securities settlement systems (2001); and the Recommendations for central counterparties (2004). The proposal is that relevant authorities will then strive to include the principles in their legal and regulatory framework by the end of 2012.
The EMIR and ESMA guidelines supersede the code of conduct on matters that they will govern but it will be necessary to determine interaction with the remaining parts of the code.
Additional EU legislation, for example MiFIR, the Markets in Financial Instruments Regulation, is in the pipeline and the interaction between those and EMIR and the Code of Conduct should be managed in a coordinated way.