Bayerische Börse AG
Bayerische Börse AG: greenmarket gains Swiss clearing house SIX x-clear AG as partner
Bayerische Börse AG / Alliance/Miscellaneous 05.08.2010 10:17 Dissemination of a Financial News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- New central counterparty (CCP) in emissions trading: greenmarket gains Swiss clearing house SIX x-clear AG as partner Munich, 05.08.2010 - Bayerische Börse AG, operator of CO2 carbon certificates trading platform greenmarket, has won SIX x-clear AG as a key partner for its post-trade processes. The clearing house of the Swiss SIX Group, SIX x-clear AG will act as a central counterparty with responsibility for all clearing and settlement on the greenmarket exchange with effect from the fourth quarter of 2010. Under the new partnership, carbon certificate trading will be faster and more secure. 'By introducing the function of a central counterparty (CCP), we are further enhancing the quality of our services in spot trading in European Union Allowances (EUAs) and Certified Emission Reductions (CERs). We are also establishing an internationally recognised financial market architecture in preparation for the launch of futures trading in carbon credits at the end of the year', explains Dr. Christine Bortenlänger, Member of the Management Board of Bayerische Börse AG. 'The function of a central counterparty eliminates default risks in the event of illiquidity of a market member, and prevents value added tax fraud. It is thus particularly essential for futures trading', continues Bortenlänger. 'We will now work with our Swiss partner to offer emissions trading, clearing and settlement processes in genuine real time as the first stock exchange to do so. As considerable benefit, the partnership will enable us to reduce fees on greenmarket by 25 per cent, making the platform even more attractive for our market members', she concludes. CCP The Central Counterparty (CCP) acts as a partner for both trading parties in the clearing and settlement of a transaction. During the clearing process, the CCP divides the purchase or sale of carbon credits on greenmarket into two separate and independent transactions. If one of the two parties to a transaction defaults, the CCP intervenes to prevent the other party from incurring damage. In return, the CCP requires market members to furnish security deposits (margins) aligned to the current day's risk estimates for the transaction in question. The clearing process takes place after conclusion of the transaction (matching), but before its clearing and settlement. The CCP setup: adding security As the central partner for all greenmarket members, SIX x-clear will eliminate the risk of default by securing both the sale and purchase sides. In addition, the CCP system replaces direct contact between buyer and seller and thus guarantees post-trade anonymity. Trading strategies thus remain unidentified and unknown, as is customary in securities trading. The function of the CCP will also practically eliminate the potential for value added tax fraud. The 'reverse charge rule' under which purchasers, not sellers, must pay value added tax has been in effect in Germany since 1 July 2010; in addition, zero value added tax now applies to carbon trading in Switzerland - the domicile of SIX x-clear. Carousel fraud has thus been beaten. The new CCP setup: increasing liquidity Under SIX x-clear's CCP function, trading, clearing and settlement services are fully automated, enabling trading strategies to be implemented in real time. Together with the narrow spreads between bid and asked prices on greenmarket, this real-time settlement represents a cash-effective financial benefit for market members, enabling them to manage cash and certificate portfolios directly and with rapid turnover. The CCP setup: adding convenience The new CCP setup enables market members to make use of general clearing member services (including credit lines and online account access), in addition to providing easy and convenient trading using Trayport's Global Vision, a trading software in widespread use throughout the commodity trading sector, and SIX x-clear's integrated clearing and settlement system. In addition, clearing members have the option of net or gross settlement, where the intermediary general clearing member (GCM) settles all sell and buy orders from the day and market members are charged only the difference (net settlement or netting). About Bayerische Börse AG / Munich Stock Exchange Bayerische Börse AG is the agency under private law of the Munich Stock Exchange, an exchange under public law. Munich Stock Exchange offers access to both the primary and secondary markets. As a German exchange under public law, it guarantees the neutrality which is indispensible for safeguarding the interests of the members. Over 11,000 securities are traded on the Exchange based on the reference market principle (i.e. the prices always conform to the highest degree of liquidity - the reference market). Munich Stock Exchange has approximately 130 German and international members. In October 2009 Bayerische Börse AG launched greenmarket, a platform for carbon certificate trading. In addition, Bayerische Börse AG is co-operator of zweitmarkt.de, a trading platform for closed funds, and organiser of the CFD trading platform CONTREX. About greenmarket Established under the umbrella of Bayerische Börse AG, greenmarket offers trading of carbon certificates, European Union Allowances (EUAs) and Certified Emission Reductions (CERs). The platform, on which trading started on 2 October 2009, currently has 29 market members. greenmarket provides an unlimited number of members with a cutting-edge market model, continuous liquidity and extremely narrow spreads secured by means of market makers and a competitive pricing model. It serves as a spot trading platform for energy companies and financial institutes. Trading is conducted on the Internet using Trayport's GlobalVision Exchange Trading System. About SIX x-clear AG SIX x-clear AG is part of the SIX Group, a Swiss provider of integrated financial market infrastructure. The company acts as central counterparty (CCP) for SIX Swiss Exchange und London Stock Exchange and is responsible for risk management within the SIX Group. The company holds a banking licence under Swiss law and the status of a Recognised Overseas Clearing House in the UK. SIX x-clear supplies efficient CCP and clearing services for the securities sector at competitive prices. Press contact: Ulrich Kirstein Bayerische Börse AG Karolinenplatz 6 80333 Munich Telephone: +49 (0) 89 549045-25 Fax +49 (0) 89 549045-55 E-mail: kirstein@boerse-muenchen.de Press contact: Werner Vogt SIX Group AG Selnaustrasse 30 8021 Zürich Telephone: +41 (0) 58 854 26 75 90 Fax +41 (0) 58 854 3227 E-mail: pressoffice@sixgroup.com 05.08.2010 Ad hoc announcement, Financial News and Press Release distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Bayerische Börse AG Karolinenplatz 6 80333 München Deutschland Internet: www.boerse-muenchen.de End of News DGAP News-Service ---------------------------------------------------------------------------
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