"The real business in securities is clearing and settlement, " says Caldwell of Caldwell Financial.
He also wants information related to the bank's market-making activities and its clearing and settlement procedures.
Because economies of scale are so important, clearing and settlement have tended to be quasi-monopolies.
ECONOMIST: Post-trade concerns could hamper a pan-European solution
To cut European trading costs to American levels, European clearing and settlement institutions must merge.
The seemingly boring but crucial and costly back-office functions of the clearing and settlement of trades are already crossing borders.
With his plan to take over Montetitoli, Mr Capuano wants to get clearing and settlement under the exchange's roof.
They would much rather see mergers of clearing and settlement businesses in different jurisdictions, which could bring down costs.
This is a big failing, because clearing and settlement account for 80% of the cost of European cross-border share trading.
The issue of clearing and settlement was a crucial factor in the government's 2011 decision to reject Singapore Exchange Ltd.
LSE, thinks the European Commission in Brussels should go further and impose a single European clearing and settlement system like America's.
Britain and Hong Kong set up a forum earlier this year to discuss working more closely in yuan trade clearing and settlement.
The joint private-sector forum introduced today will specifically be looking into clearing and settlement systems, market liquidity and the development of new yuan-denominated products.
Instead of competing with the various mWallets with our own mobile wallet, P2P provides the clearing and settlement BETWEEN all the various proprietary mWallets.
Earlier this year, Britain and Hong Kong set up a forum to discuss working more closely in the areas of yuan trade clearing and settlement.
Visa earns revenues by charging fees for its transaction processing service, which involves routing payment information to facilitate the authorization, clearing and settlement of transactions.
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More realistically, market forces will drive clearing and settlement houses to join forces, because it is more cost-efficient when buyer, seller and security are linked.
Europe's banks may have to deal with up to 31 different national and cross-border clearing and settlement systems when trading in European shares and bonds.
LSE's problems neither, for example, can on its own untangle the web of clearing and settlement arrangements that add most of the cost to cross-border trading.
The share-trading business involves three different jobs: trading, clearing and settlement.
The attainment of these objectives might be facilitated by the introduction of a central counterparty but may also be achievable under the current framework for clearing and settlement.
Anyway, most of them fret more about improving clearing and settlement in Europe, which is much more expensive than in America and so offers greater scope for savings.
In London, clearing and settlement have been split from trading.
An example is virt-x, a small electronic exchange for European blue-chip shares which offers clearing and settlement alternatives: nearly all the liquidity has migrated to just one of them.
ECONOMIST: Post-trade concerns could hamper a pan-European solution
This isn't the first time a company has locked horns with the DTCC, the brokerage-owned private company that handles the bulk of the clearing and settlement in U.S. securities transactions.
Earlier this year Euroclear and Crest, two clearing and settlement firms, merged to form the biggest such conglomerate in Europe, covering exchanges in five countries Belgium, France, Ireland, the Netherlands and Britain.
Clearing and settlement systems, by contrast, are boring businesses.
In other words, he is leaning towards the German model of a vertical silo in which a stock exchange oversees not just the trading of securities, but their clearing and settlement as well.
Although neither European exchange has abandoned its interest altogether, both are sidelined for the moment, pondering the British competition authorities' requirement that they reduce their stakes in clearing and settlement operations before bidding.
Enforcement will be the real challenge, assuming that all the cumbersome legislation goes forward on financial conglomerates, pensions, new capital-adequacy rules, risk capital for small businesses, clearing and settlement, accounting standards and insolvency rules.
Because clearing and settlement are complex activities and their interplay with trading is not well understood, there is plenty of scope for interested parties to lobby furiously with arguments as bamboozling as three-dimensional chess.
ECONOMIST: Stock-exchange mergers: Three-dimensional chess | The
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