BNP Paribas sets sights on Singapore-London post-trade service
BNP Paribas aims to capitalise on London-Singapore cross-listing
BNP Paribas Securities Services is planning to offer a post-trade service for banks and brokers that want to take advantage of the new cross-trade deal between the London Stock Exchange and the Singapore Exchange.
Under the cross-trade deal, the top 37 companies listed on SGX will become available to trade on the LSE before the end of this year; in return, blue-chip FTSE 100 stocks from the LSE will become available on SGX in the first half of 2013. The idea is to boost liquidity at both exchanges and make it easier for international investors to access each other’s markets.
Drawing on that deal, BNP Paribas will provide clearing, settlement and safe-keeping of both Singaporean stocks traded on the International Board, and FTSE 100 stocks traded on SGX. The bank’s plan is to market itself to Singapore-based brokers that don’t have membership of a UK clearing house. BNP Paribas is a member of clearinghouse LCH. Clearnet.
“We are a local custodian in 25 markets clearing two million executions daily as a member of 11 clearing houses globally,” said Philippe Ruault, global head of clearing and settlement at BNP Paribas Securities Services. “We have a long trade-record of simplifying complexity in the post-trade environment. We look forward to support the LSE and SGX in future initiatives.
Exchanges have been looking for ways to increase their revenues in recent years, as competing trading platforms and declining equity trading volumes have eaten away at their traditional core business. Cross-listing projects have become commonplace; cross-listing deals exist between CME Group in the US and Brazil’s BM&F Bovespa, as well as between Canada’s TMX and various US exchanges including NYSE.
Meanwhile, post-trade costs have continued to play a central role in market developments in recent months, both in Europe and Asia. In Singapore, the closure of dark pool Chi-East in May was attributed to poor trading volumes, which in turn nullified the post-trade savings that had been envisaged from the platform’s agreement with LCH. Clearnet. In Europe, several organisations including FIX Protocol and the COBA project have set out solutions for the creation of a consolidated tape of post-trade data, the lack of which has been a bone of contention ever since MiFID in 2007.
BNP Paribas launched a local custody service in the US at the end of October, targeting European, Asian and Middle Eastern clients that operate on international markets. The US operation provides local clearing, settlement and custody of all major asset classes listed on NYSE Euronext and Nasdaq OMX. BNP Paribas currently has approximately $7 trillion in assets under custody in total.
