The new model simplifies the post-trade process of LuxSE and allows for a more streamlined and efficient settlement of securities transactions made on a channel encompassing 21,500 tradable instruments.

Pierre Schoonbroodt, Member of the Executive Committee at the Luxembourg Stock Exchange commented: “We are delighted to establish this new partnership with BFF Bank, which enables us to significantly improve and simplify the post-trading experience for our trading members. Through this collaboration, we are now able to offer a new electronic channel to send settlement instructions in a fast, integrated and secure way, without making any changes to the order transmission and trade confirmation process we have established with our trading members.”

Enrico Tadiotto, VP Transaction Services Department, BFF Banking Group, added: “We are proud of starting this partnership with LuxSE, making one of our post-trade models available to the market, and being a reference partner for our customers in providing innovative and tailored solutions.”

No clearing membership required

LuxSE operates its markets on the Optiq trading platform and offers the possibility of bilateral, non-guaranteed and guaranteed settlement channels. In the new set-up, the non-guaranteed settlement model, also known as pass-through, has been replaced by straight-through processing (STP). The existing Central Counterparty (CCP) process with LCH.Clearnet SA remains in place for the guaranteed settlement channel.

The new post-trade model brings multiple benefits to LuxSE’s trading members. In the STP set-up, the mandatory clearing membership required under the previous pass-through model no longer applies. Moreover, trading members can now select between Euroclear Bank and Clearstream Banking Luxembourg as their International Central Securities Depository (ICSD), while trades made on the previous pass-through channel required settlement by Euroclear.  

In this new model, LuxSE will provide its trading members with a daily trade reconciliation file including the indication of the counterparties. BFF Bank will generate and dispatch settlement instructions to ICSDs based on the trading information provided by the Optiq trading system.