Nasdaq OMX lowers clearing fees, expands eligible collateral

Wed Apr 30, 2014 11:47am EDT

* Nasdaq OMX Nordic clearing house offers some discounts

* "Green" bonds eligible as collateral

* Seeking to take advantage of EU authorisation

LONDON, April 30 (Reuters) - Transatlantic exchange operator Nasdaq OMX has lowered clearing fees and expanded the list of assets that can be used as collateral at its Nordic clearing house after the business was authorised under new European Union rules.

The changes signal an attempt to challenge LCH.Clearnet, the clearing house majority-owned by the London Stock Exchange which is the leading clearing house for interest rate swaps but has yet to be authorised by the EU.

Deutsche Boerse's Eurex Clearing received the green light from European regulators earlier this month.

Global regulators decided after the 2007-09 financial crisis that derivatives such as interest rate swaps and credit default swaps, previously bought and sold through dealers, should be traded on electronic platforms, centrally cleared and recorded, in the interest of improved clarity and reducing risk.

Europe's clearing houses had to reapply to operate in the region under the new legislation, known as the European Market Infrastructure Regulation (EMIR).

Nasdaq's Nordic clearing house was the first to be reauthorised, a step that started the clock for the European Securities and Markets Authority to decide which types of derivatives contracts must be cleared across the 28-country bloc.

Being first to clear the regulatory approval gave Nasdaq a head start in preparing for mandatory clearing of derivatives and in attracting clients to its services.

A clearing house is backed by default funds to ensure a trade is completed even if one side goes bust.

In a statement, Nasdaq said the extensive work carried out to win approval had enabled its clearing house to enhance and streamline its procedures and increase efficiencies.

Stockholm-based Nasdaq OMX Clearing will introduce two new fee and rebate models for clients clearing large volumes of fixed income products denominated in Swedish crowns. They will be available from Jan. 1, 2015.

In the interim, Nasdaq is offering discounts including reduced registration and settlement fees for some interest rate swaps and has lowered the charge for the safekeeping of collateral.

Nasdaq also said certain "green" bonds - bonds used to support private sector investments in renewable energy and energy efficiency - would be eligible for use as collateral. (Reporting by Clare Hutchison; Editing by Mark Potter)

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