Nasdaq OMX Nordic and European Multilateral Clearing Facility (EMCF) have launched a full central counterparty clearing (CCP) service on the Nasdaq OMX exchanges in Copenhagen, Helsinki and Stockholm.

Nasdaq OMX has introduced mandatory CCP on nine Nordic securities — three each Finnish, Swedish and Danish stocks. The introduction of CCP in the Nordic equity markets is part of Nasdaq OMX’s strategy to increase market liquidity through an open, competitive CCP model. Nasdaq OMX Nordic and its three CCP partners (EMCF, SIX X-clear and Euro CCP) have further agreed to achieve competitive clearing by January 2010.

“This is the biggest structural change for the Nordic equity markets since trading became electronic in the early 1990s,” said Hans-Ole Jochumsen, president of NASDAQ OMX Nordic. He expects the introduction of CCP to increase the effect on volumes.

Central counterparty clearing involves the legal transfer of obligations to a central counterparty which becomes the buyer to the seller and the seller to the buyer. With the CCP counterparty risk, or the risk that one party to a trade suffers losses because the other party cannot fulfil its obligations, is mitigated.

Central counterparty clearing also enables netting of trades. This provides significant cost savings from lower margin requirements, fewer settlements and simpler operations.

The Nasdaq OMX Group is the world's largest exchange company. It delivers trading, exchange technology and public company services.

EMCF provides competitive central counterparty clearing services for the MTF market. Its main shareholders are Fortis Bank Nederland and Nasdaq OMX Nordic Group.