UK-based exchange operator London Stock Exchange (LSE) has signed deals with two investment banks to help grow liquidity on its new market for international stocks.
HSBC and Barclays have agreed to support the LSE’s International Board, which launched last year, following a cross-quotation agreement with the Singapore Exchange that allowed constituents of the STI 30 and MSCI Singapore Free Indices to be traded from London.
HSBC will act as a market maker in a number of Singaporean stocks using its existing LSE membership, while also providing access to the new market segment for its clients. Meanwhile, the investment banking division of Barclays is also offering client access to the International Board.
The LSE is in talks with other potential liquidity providers and is looking to expand the range of securities on the International Board by establishing similar agreements with other exchanges.
The ability to trade international stocks from London will offer new opportunities for European buy-side firms that typically pass orders for overseas equities to an Asia- or US-based trading desk.
“In line with our global positioning, our ultimate aim is to offer 24×5 trading of all major cash equities from London,” James Baugh, head of equity sales, London Stock Exchange, told theTRADEnews.com. “Offering our members the ability to access securities outside of Asian trading hours gives them a new strategic way of looking at these markets.”
Trades in Singaporean stocks executed on the International Board are denominated in Singapore dollars and settlement occurs at Singapore’s Central Depository. LCH.Clearnet, the central counterparty the LSE is close to acquiring, will clear for the new market segment.