In an effort to derail a bid by the U.S. Depository Trust & Clearing Corp. (DTCC) for the European clearing firm LCH.Clearnet, a consortium involving interdealer broker Icap has launched a counterattack, according to news reports. The consortium includes 10 or more financial institutions and market participants, as well as Icap. Although discussions are in very primary stages, the move is still encroaching on the non-binding agreement LCH.Clearnet signed with the DTCC last October.

Among other things, the move illustrates the industry’s hunger to own a post-trade business. As I mentioned in a previous post, the benefits of owning a risk management facility, for the dual purpose of mitigating risk and earning extra revenue, are sweet. In addition, Icap will benefit from the possible acquisition as central party clearing is being extended into the over-the-counter (OTC) space.

According to news reports, the consortium is planning to offer a higher price for LCH.Clearnet than the DTCC. Let the battle begin.
-- Oksana Poltavets, Dealing with Technology