Bloomberg News

Swiss Bourse Expands Structured Risk-Management Service to U.K.

February 24, 2012

Feb. 24 (Bloomberg) -- SIX Swiss Exchange Ltd., operator of the Zurich bourse, will start accepting collateral from U.K. companies as it extends its risk-management service for structured products beyond domestic banks.

The Collateral Secured Instruments service, or COSI, takes guarantees from Swiss companies that issue securitized derivatives and uses them to reimburse investors in case of a default. The exchange started the service in 2009 after the collapse of Lehman Brothers Holdings Inc. and holds about $2.5 billion in collateral at present. It has been working with lawyers and users to overcome differences in national bankruptcy laws in order to extend the service, the company said in an e- mailed statement today.

“We have carefully been working on the proper approach to make COSI accessible to international collateral providers,” Christian Katz, chief executive officer of the Swiss stock exchange, said in the statement. “The first step has now been taken with the connection to the United Kingdom.”

Zurich-based SIX operates Scoach, an exchange for structured products, with Frankfurt-based Deutsche Boerse AG. The Swiss stock exchange, home to Nestle SA and UBS AG, is the largest of Europe’s bourses to remain closely held.

SIX, owned by about 150 brokers and banks that are also users, was formed in a three-way merger at the start of 2008. It offers securities trading, post-trade services, financial information and data and payment transactions. The group is owned by Swiss banks including UBS and Credit Suisse Group AG and asset managers.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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