The thing about useful stuff is: UBS switch their LSE clearing to X-Clear

UBS switch their LSE clearing to X-Clear Wednesday, December 03, 2008

Image via WikipediaIt wasn't a huge surprise to see that UBS was going to switch its' clearing for its' London Stock Exchange ["LSE"] traded equity business to the Swiss based X-Clear from LCH.Clearnet. After all,

they are both Swiss and you should never under-estimate the power of relationships e.g. inevitably, UBS personnel will be on advisory boards at X-Clear and will be one of the largest X-Clear users in Switzerland
they will probably enjoy margin netting benefits by combining their their Swiss and UK equity business at a single clearer, which will be financially beneficially
they may enjoy cheaper tariffs or better margin rates

It was possible for UBS to do this after the LSE decided to allow X-Clear to offer clearing services in competition with its long-standing clearer, LCH.Clearnet. Unlike a number of its' rival exchanges including the Swiss Exchange which is part of the same group that owns X-Clear, LSE doesn't own and operate its' own clearer, with the consequence it doesn't face losing revenue from opening up this element of the trade lifecycle to competition.

However, I chuckled when reading the comment made by Robert Barnes, managing director, equities at UBS who said "that by deciding to switch to X-Clear, UBS believed that it would help accelerate a “market-driven” solution to interoperability, rather than waiting for regulators to apply further pressure to get the process moving."

Firstly, it was the LSE's decision to enable competition that allowed this to happen, albeit evidence of client support for this must have existed. Secondly, UBS are doing this for financial reasons rather than on altruisic grounds for the "good of the market". Perhaps UBS should now be using its' market clout to insist that other markets, including Switzerland and Germany, follow suit.