Traiana pitches for LCH’s FX clearing flow

Post-trade technology provider Traiana has made a bid for banks and buy-side firms to use its central counterparty (CCP) connectivity service to clear non-deliverable forwards (NDFs) through LCH.Clearnet's ForexClear, after announcing the addition of ForexClear to Harmony CCP Connect yesterday.

ForexClear has quickly established itself as the leading CCP in the foreign exchange market – far outstripping rival CME Group. But Traiana might not immediately see much of ForexClear's flow, given dealers selected MarkitServ to provide middleware connectivity for interbank clearing prior to the launch of ForexClear in March 2012.

But Andrew Coyne, chief executive of Traiana in London, believes market participants need a choice of provider and it will wield a competitive advantage over MarkitServ when client clearing gets off the ground, given Traiana's extensive network of prime brokers.

"Client clearing will play to Traiana's strengths in prime brokerage connectivity and have a significant impact on flow. It's important that there is open access to CCPs, and that market participants have a choice of provider. We don't yet know when client clearing will take off, but the important thing is readiness, which is why we have put this in place," says Coyne.

According to Gavin Wells, chief executive of ForexClear in London, extending ForexClear's middleware reach to Traiana was a natural step, not only because of the vendor's footprint in FX prime brokerage but also because of the importance of giving market participants a choice in how they route trades to the service.

Client clearing will play to Traiana's strengths in prime brokerage connectivity and have a significant impact on flow

Traiana launched Harmony CCP Connect in March 2011, with CME Clearing the first CCP to be connected. In addition to ForexClear, Traiana is also in discussions with the Singapore Exchange and Hong Kong Exchanges and Clearing, according to Coyne.