November 1, 2018 / 3:11 PM / 18 days ago

NEX allows repo clearing in Europe ahead of Brexit

Nov 1 (Reuters) - London-based NEX Markets said on Thursday users of its BrokerTec Europe platform would be able to clear repo trades on Deutsche Boerse as it prepares for Britain’s exit from the European Union.

The unit of NEX Group said clearing for repo, or repurchase agreements, on the German exchange’s Eurex Clearing would be available by the end of 2018.

"There are emerging opportunities in a post-Brexit world, as well as a desire to extend and diversify the clearing choices that our customers have when trading repo," said here John Edwards, managing director of BrokerTec Europe.

Having an alternative clearing house in the euro zone would ensure no disruption in service for NEX customers if Britain were to crash out of the bloc without a deal.

The move by NEX, which is being taken over by U.S.-based CME Group, comes just a week after Deutsche Boerse announced plans to intensify competition with rival London Stock Exchange ahead of Brexit.

Euro clearing has become a Brexit battleground as some EU policymakers want it moved from London, where LSE dominates, to the single currency area after Britain leaves the bloc next March, threatening the city’s role as a global financial centre.

However, LSE has said that Deutsche Boerse was simply getting a “small slice of a growing pie”.

BrokerTec is a market leader for electronic trading in many U.S. and European fixed income products, including U.S. Treasuries, European Government Bonds and European Repo.

Taking similar steps to Brexit-proof its operations, London-based FX and fixed income trading platform NEX is also opening an EU base in the Dutch financial capital Amsterdam and establishing a new trade reporting unit in Sweden. (Reporting by Muvija M and Noor Zainab Hussain in Bengaluru Editing by Saumyadeb Chakrabarty)

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