LSE opens regulatory talks on data service launch

Thu Dec 15, 2011 6:33am EST

* LSE eyes OTC trade repository

* Seeks control of FTSE International to boost derivatives

LONDON Dec 15 (Reuters) - The London Stock Exchange has started talks with British regulator the Financial Services Authority (FSA) about launching a trading data service for over-the-counter (OTC) derivatives.

The LSE already offers a trade data repository called UnaVista TRS, for share transactions, but is eyeing expansion into OTC products ahead of regulatory reforms to that market.

"We are in very early discussions with UK regulators about the possibility of using the UnaVista TRS as a registered trade repository for OTC derivatives," said Mark Husler, head of business development in the LSE's data unit.

European regulators and their U.S. colleagues plan to pass into law next year changes that will force the $600 trillion OTC market to use exchange-like services, such as trade repositories and clearing houses.

Lawmakers like trade repositories because they act as a central database of all outstanding trades which can help them unravel the mess caused by a major trading firm default, like that of Lehman Brothers in 2008.

The British exchange said on Monday it was to buy publisher Pearson's 50 percent stake in FTSE International for 450 million pounds ($703 million) to boost its derivatives trading business.

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