Expected to be operational in the first half of 2014, the new exchange will leverage the existing infrastructure of its CSD Monte Titoli in Italy, which will enable the LSE to compete successfully with rivals Clearstream and Euroclear.
Borsa Italiana CEO and LSE capital markets director Raffaele Jerusalmi said, "The Group is well placed to provide a full range of post trade services to meet the evolving needs of our customers arising from on-going financial regulatory change and the continued focus on operational efficiency."
In relation to the launch of the new CSD, LSE has inked an agreement with the global investment bank JP Morgan to offer settlement, custody and asset servicing services for its international collateral management business.
Importance of CSD has increased in the recent past, as the new European Market Infrastructure Regulation (Emir) has mandated that central counterparties (CCPs) are vital to hold collateral assets posted as margin or as default fund contributions at a securities settlement system.
The stock exchange operator said that due to customers’ demand, Luxembourg was selected as the preferred location.
