Chi-X, LSE Rival, Will Offer Clearing Choice to Lower Costs

By Nandini Sukumar

Feb. 3 (Bloomberg) -- Chi-X Europe Ltd., the electronic market started last year to compete with European exchanges, plans to give customers a choice of clearing houses to process their trades and lower transaction costs.

Clients should be able to use both Switzerland’s SIX x-clear AG and European Multilateral Clearing Facility NV from mid-2009, Chi-X Chief Executive Officer Peter Randall said in an interview, without being more specific. The two post-trade service providers have signed an agreement to allow use of the other’s electronic system, he said. The proposal is awaiting regulatory approval.

London-based Chi-X is a unit of Instinet Europe Ltd. and competes with other alternative trading systems such as Turquoise and the European ventures of Bats Trading Inc. and Nasdaq OMX Group Inc. as well as traditional bourses including London Stock Exchange Group Plc. The new platforms are seeking to gain market share partly through lower trading and clearing costs.

“Choice and competition will result in lower prices,” Randall said in the interview.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net.