Euronext Migrates Bonds to Luxembourg's Sage Platform
February 11, 2008
NYSE Euronext is using the Luxembourg Stock Exchange's Sage platform to process corporate bonds listings and corporate actions in Europe, the companies announced last week. The Luxembourg exchange uses the Sage, or Systeme d'Admission et de Gestion Electronique, service to list corporate debt issues.
The move follows the migration in May of all securities on the Luxembourg Stock Exchange to Euronext's NSC cash trading system. In a statement, the exchanges described NSC as "Europe's prime pool of liquidity and the point of access to an extended [dealer] membership." NYSE Euronext agreed in December to take ownership of the NSC platform in a deal that will see it acquire Atos Origin's 50 percent stake in AtosEuronext Market Solutions, which also developed Liffe Connect.
The exchanges, through a partnership dubbed LuxNext, aim to establish a common standard for the listing and trading of corporate bonds on European exchanges, and have promoted NSC and Sage as central to the project. LuxNext is open "to new initiatives in association with the various contributors to market operation," said the exchanges, and favors "transparency, efficiency and innovation in the corporate-bond sector." NYSE Euronext also operates NYSE Bonds, an odd-lot platform re-launched in April.
The Luxembourg exchange lists 32,000 bonds. Cash trading last year on NSC increased in every category except for bonds, where it posted a 1.5 percent year-over-year decline in 2007, according to NYSE Euronext's annual results, released last week.
NSC's total bond-trading volume last year was $2.39 billion. Turnover in bonds listed on the Luxembourg exchange was about $1.57 billion in 2006, the most recent available statistics. Those numbers are far below the monthly volumes reported by over-the-counter bond platforms.
The Luxembourg exchange said in January that it is setting up a central counterparty (CCP) structure for clearing and settlement, with LCH.Clearnet acting as CCP. The exchange said the structure would give users the option of using Euroclear Bank or Clearstream Banking Luxembourg. NYSE Euronext holds stakes in LCH.Clearnet and Euroclear, both of which provide clearing and settlement for Euronext. Final implementation of Luxembourg's CCP model is slated for March 15; testing began Jan. 7 with the member-users of the Luxembourg exchange and LCH.Clearnet.
