Following the completion of its Aquis acquisition, which was originally announced in November, SIX will have listing and trading venues situated in mainland Europe, the UK and Switzerland.

The result could mean a unique opportunity for the exchange operator to create a three-pronged fully pan-European trading venue, the first of its kind to come to market within the region.

“Thinking long term, we have the opportunity to think about building a pan-European venue with three legs to stand on,” Bjørn Sibbern, chief executive officer of SIX Group, tells The TRADE.

“Subject to the closing of the acquisition of Aquis, we will be the only exchange with listing venues in Switzerland, EU and the UK, and that creates a unique opportunity. We have two other listing venues that work well so we need to see how we want to develop that.”

Aquis-ition

The exchange group confirmed its plans to acquire Aquis in November last year, a deal which remains subject to closing conditions and regulatory approvals. The Swiss exchange group has agreed to acquire the entire issued and to be issued ordinary share capital of Aquis at a price of 727 pence per share, valuing the entire issued and to be issued share capital of Aquis at approximately £207 million (based on Treasury stock methodology).

Read more – SIX agrees to acquire Aquis Exchange

Speaking on the drivers behind the deal, Sibbern explains that the Aquis acquisition was a natural fit with complimentary offerings to those already in play at SIX.

“Aquis has a pan-European trading offering with more than five percentage market share. They’ve been the most successful MTF in the last couple of years in terms of growth,” he says.

“They run on their own technology – a technology we use in Asia for a joint venture we have on crypto derivatives called Asia Next. They have a small listing offering and then also have a data offering. It’s a great match to what we have at SIX. We want to keep the brand we want to keep the management team and we want to keep business model – including competing with ourselves.”

Among its many product expansions announced in the last year, Aquis confirmed plans to launch a new VWAP crossing service in the UK and Europe in December. The new offering will use conditional indication of interests (IOIs) and use a VWAP period of five minutes. Members will be able to submit IOIs at a volume weighted price using all the major reference markets for that calculation.

While UK endevours for the offering have continued as usual, plans for the product in Europe were brought to a standstill at the end of last year thanks to a last-minute rule change by EU watchdogs.

Featured in its final report on equity transparency, published in December, the European Securities Markets Authority (ESMA) added an additional line to its text surrounding the specific characteristics of negotiated transactions, preventing exchanges from using the negotiated waiver model on their own behalf.

However, a recent consultation released by the European Commission suggests it could be exploring reversing this decision.

Read more – European Commission exploring US-style order protection rule among other market reforms

When asked about the group’s future plans for either Aquis’ potential VWAP crossing offering or its own one, Sibbern confirms that nothing is being ruled out.

“From the SIX point of view, we look at many of these types of different functionality,” he explains. “We have been one of the exchange innovators around midpoint matching […] and this [VWAP cross] is also one of the things that we’re looking at.”

The future European venue landscape

Something that Sibbern is keeping tabs on – like many that sit in similar seats to his – is the continued decline of lit volumes in Europe. Lit markets now account for just under 30% of volumes in Europe, the lowest they have ever been.

Institutions’ increasing appetite for alternatives to the incumbent exchanges have continued to drive innovation in the European trading venue landscape including the launch of new trading mechanisms and the growth of dark trading.

SIX itself has a successful dark trading business both in Switzerland and Spain and Sibbern reaffirms the exchange’s stance that dark trading will continue to play a central role in the market.

The danger, he notes, is when market’s reach a point where the fractional portion of volumes taking place on exchange set the reference price for all other trading mechanisms.

“While Mifid II didn’t achieve its original goal of moving more volume onto lit venues, the reality is that we’ve seen volume proliferate across alternative trading venues, as institutional investors demand increasing choice over where and how they execute,” he says.

“If you see more flow go to SIs, OTC, private rooms that will just diminish the price sitting on the exchanges which is important because everybody uses that as the reference price.”

The venue landscape much like most corners of the financial markets is constantly evolving as the needs of those operating within them also shift. While not currently allowed under regulation in the UK and Europe, ‘private’ or ‘hosted’ rooms have continued to come up during industry discussion in recent months as the explosion of the concept in the US piques the interest of investors in Europe.

“We will see private rooms in some shape and form in Europe. I don’t think it would be as big as US but it’s too early to conclude,” adds Sibbern. “It’s something we’re mindful of and something we’re looking at. It’s not an offering we have in place but something we have to monitor of course.”

Another US-led innovation also occupying airtime in Europe and the UK currently is the concept of 24-hour equities trading. While a handful of technology providers have offered out of hours trading for several years now, the decision by several incumbent exchanges – namely NYSE, Nasdaq and Cboe – to begin exploring implementing an extension of trading hours suggests the theme is becoming mainstream in the US.

Read more – Cboe to launch 24-hour US equities trading

Europe, however, seems to tell a different story. A few years ago, European participants were petitioning for the shortening of market hours. As US venues apply to regulators for the lengthening of their trading day, their European peers have shown little to no sign of following suit.

“I do not see any strong customer demand for expanding the opening hours,” says Sibbern. “In Europe, it will probably be a case of wait and see what the development is in the US. Where it’s different is for structured products where you see customers wanting to also trade in the evening.”

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The addition makes the bank the ninety second trading member on SIX’s platform.

Co-head of cash markets at SIX, Gregor Braun, said: “We are delighted to welcome Barclays Bank PLC as our newest trading participant on our platform. 

“We look forward to supporting Barclays in leveraging the exceptional liquidity and quality of our order book for Swiss securities and wish them successful trading. Their presence on SIX underscores the attractiveness and robustness of our market infrastructure.”

SIX claims to provide access to more than 60,000 securities, including names such as Nestlé, Roche, and Novartis.

Barclays said the move aligned with its plans to become “a UK-centred leader in global finance”.

The addition follows a busy few months for SIX across several of its business areas. The exchange moved to acquire Aquis in November last year, expanding its pan-European reach.

Read more – SIX agrees to acquire Aquis Exchange

The deal – which would grow SIX’s trading, data, listings and technology businesses – is currently awaiting regulatory approval.

SIX posted positive full-year results for 2024, with total operating income up 4.6% to $1,798.76 million, bolstered by a strong performance in its exchanges segment.

Its exchanges unit – comprised of SIX Swiss Exchange, SIX Digital Exchange and Borsa Madrid (BME) – generated operating income of $383.26 million, up 2.6% compared to the previous year, with the firm highlighting the business unit’s new organisational structure – adopted in June 2024 – wherein the exchange took on an asset-class-based approach.

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In 2023, SIX recorded a decade-low in both trading volumes and volatilities – a trend which has been witnessed throughout Europe.

The exchanges business unit generated operating income of $379 million, down 10% year-on-year (YoY).

Despite this, SIX Group achieved a total operating income of $1,738 million, a growth of 3.5% YoY at constant exchange rates.

SIX Swiss Exchange was challenged by low trading volumes in cash equities across Europe, however, the Group claimed that the exchange recorded the lowest overall decline when compared to its peers.

Trading turnover at the exchange decreased by 13.4% year-on-year to £93 million. Elsewhere, the trading volume in bonds increased by roughly 11% compared to the previous year to $1,192 billion.

In its earnings report, SIX emphasised the importance of BME in its growth strategy.

Read more: SIX Group gains approval in Spain for €2.8 billion BME acquisition

BME continues to play an important role in the operational and financial success of SIX, having generated 18% of the Group’s total revenue in 2023. Trading turnover on BME Exchange did, however, decrease by 16.8% to $344 billion.

SIX Group’s main initiative for the provision of digital asset service, SIX Digital Exchange (SDX), hit major milestones throughout 2023, according to the Group.

Last year, SIX onboarded eight new members across its SDX services, marking 16 members in total across its digital securities and Web3 offerings.

In an earnings call this morning, SIX revealed that it aims to grow total operating income by more than 3% per annum. The Group stated that its diversified business model will have achieve this goal.

“We are proud to have outperformed the previous year’s performance on an operational level. We are delivering on our growth strategy and the result is a testament of our diversified business model. Unfortunately, the strong operating result was affected by two major non-cash value adjustments,” said Jos Dijsselholf, chief executive at SIX.

“Nevertheless, we’re excited to leverage our skills and experience to deliver even more value to our clients. We are confident about our future growth, consistent financial performance, and ability to generate strong returns for our shareholders.”

The post SIX Group feels impact of lower trading volumes despite increase in total operating income appeared first on The TRADE.

“We’re at the roll-up-your-sleeves, all-hands-on-deck stage,” said Keith Evans, executive director of the Canadian Capital Markets Association (CCMA), who this week highlighted one of the key remaining concerns for the market ahead of next year’s switch to a shortened settlement cycle.

According to Evans, the CCMA and Canadian participants have been working towards matching details of 90% of trades by 3:59am on T+1, but there are now fears that that deadline could be brought forward. With this in mind, Evans has called for immediate regulatory certainty around the trade-matching deadline to eliminate doubt for firms preparing for next year’s switch.

“With less than a year to go, the interconnected participants in the Canadian capital markets cannot afford to restart planning to meet an earlier trade-matching threshold,” the CCMA said in a statement. “Further delays in confirming the trade-matching deadline will increase T+1 implementation and systemic risk, potentially impacting financial system stability.”

However, as Virginie O’Shea, founder and CEO of Firebrand Research, points out – tweaks to the timeframes and details of certain processes can often be made after the various testing phases. “The usual experience with market structure changes is that practical details are altered once firms have tested their viability,” explained O’Shea, meaning that the CCMA and other market participants may not get the answer to this question for a while yet.

Europe and Asia have some catching up to do

But the concerns don’t stop there. In terms of preparedness, there is a sense that organisations in the US have taken the initiative on T+1 and are on track for go-live – but worries remain for organisations in other regions.  

“Our concern lies with the European and Asian firms,” said Michele Pitts, custody product head for Citi’s North America’s strategic initiatives, on The TRADE’s sister publication, Global Custodian’s Smarter Securities podcast. “There is less of a readiness, given the time zone challenges, specific concerns around funding and meeting the affirmation timeframe of 09:00pm on trade day, which is problematic.”

Questions remain over the possibilities in these regions to send instructions on trade date, whether limitations around batch processing may prevent that, and additional knock-on effects that may impact clients further down the chain.

“Broadly speaking, the future of settlement in the [APAC] region is yet to be defined,” explained Lukas Conrad, regional head securities services APAC for SIX Group. “The siloed regulatory framework across the many developed markets in APAC will only add to the complexity. Adjusting to T+1 in the US will be enough of a challenge to work with, but the emergence of additional markets seeking to move T+1 will add significant pressure for local market participants.”

What’s needed is a thorough investigation into these questions, and an engagement across markets and geographies to find suitable solutions. But, as O’Shea notes, “there has been a relatively slow process of engagement thus far” among European and Asian buy-side firms, which will need to be stepped up in the coming months to facilitate a smooth transition to T+1.

Automate to expedite

It has been widely publicised throughout the course of the process, that the key to a successful T+1 transition lies in the automation of manual processes that remain present in the market today.

Val Wotton, managing director, institutional trade processing and president & CEO of the Depository Trust & Clearing Corporation (DTCC) ITC, reaffirmed this point last week in a message to the market, stating: “To meet the accelerated settlement timeframe, it is critical that market participants eliminate manual processes and maximise automation in the post-trade pre-settlement space.”

One aspect of that is the often-poor connectivity and communication between the buy-side, sell-side and custodians throughout the trade cycle, which as James Pike, head of business development at Taskize, points out, is a crucial element needing to be addressed ahead of the transition.

“If there is a problem between the broker and the buy-side organisation, the issue moves from the buy-side down to the custodian and then back up, resulting in a very bilateral process,” Pike says. “These processes can take time, sometimes days or even weeks. It’s therefore crucial to create a process that facilitates the flow of information between all three parties almost simultaneously. This currently doesn’t happen, so it will be a significant shift and a considerable change.”

Elsewhere, the technological requirements for completing trades on a same-day basis are under the microscope for organisations, with manual processes reportedly unviable in a T+1 environment.

The final ruling stated that institutional trades must be allocated, confirmed and affirmed “as soon as is technologically possible and no later than trade date”. Wotton points out that the technology to achieve same-day affirmation (SDA) already exists, and implementation of those technologies “significantly reduces the number of post-trade exceptions as well as costly reconciliation efforts”.

Speaking to Global Custodian earlier this year, Tony Freeman, post-trade expert who sits on the UK’s T+1 taskforce, noted that SDA in the US sits at 68%. While this is likely to have been improved upon since the article was published last month, the figure “needs to be very close to 100% if T+1 is going to work” Freeman said. “It is absolutely clear that batch processing, still prevalent, has to be eliminated because the T+1 window to resolve mismatches no longer exists.”

Whether the industry can achieve those figures in the next 12 months, as well as find solutions for problems not covered in this article – securities lending, FX, corporate actions, for example, which you can read about in our ‘even deeper dive’ by clicking here – we’ll have to wait and see. As we draw closer to May 2024, a lagging market may result in a delayed implementation date – but as yet, that is not something that the SEC and other authorities have publicly discussed.  What we do know when it comes to T+1 is that the market will be only as strong as its weakest link, therefore it is incumbent on all participants to take the deadline seriously and prepare accordingly.

The post One year to T+1: ‘Time to roll up your sleeves’ appeared first on The TRADE.

The Bank of England’s annual supervision of financial market infrastructures (FMI) report this week laid out plans for the future supervision of systematically important FMIs.

“As a global financial centre, the smooth and safe operation of UK FMIs is vital for international markets,” said deputy governor for financial stability, Sir Jon Cunliffe. “The Bank’s supervision of FMIs is essential for financial stability by ensuring that their risk management and resilience frameworks enable them to carry out their vital functions in normal times and during periods of stress.” 

The bank regulates three broad categories of FMI: payment systems, central securities depositories (CSDs) and central counterparties (CCPs). Currently, it supervises one CSD (Euroclear UK & International) and three CCPs (ICE Clear Europe, London Clearing House (LCH) and the London Metals Exchange); along with payment platforms including Bacs, CHAPS, LINK, Visa Europe and Mastercad Europe, among others.  

The role of FMIs is to simplify complex networks of counterparty exposures, making financial transactions more efficient and secure. Their central role in the financial system means that maintaining their operational and financial resilience is of crucial importance to financial stability. 

However, FMIs can be exposed to multiple sources of disruption, including from other market participants and service providers, as well as their own operations, which can give rise to both financial and operational risks. “FMIs must be financially and operationally resilient in order to be able to absorb, rather than amplify, shocks,” stressed the Bank of England.  

Market volatility over the past year has demonstrated the importance of the resilience of FMIs for financial stability in the UK and abroad, and the latest report outlines how the central bank has stepped up its supervision of these entities in response to the challenging times.  

This includes a new agenda on CCP resilience and recovery, an updated policy on the recognition and supervision of overseas CCPs and CSDs that want to provide services in the UK, and targeted enhancements to supervisory frameworks – with new requirements on FMI operational resilience including consultations to reflect an increased reliance on outsourcing. Also this year, the Bank published its first public supervisory stress rest of UK CCPs, which (reassuringly) confirmed their resilience to market stress scenarios calibrated to be of equal or greater severity than the worst historical market stresses. 

“The BofE’s annual report reinforces the increasing importance of interconnection between FMIs across Europe.”

“The BofE’s annual report reinforces the increasing importance of interconnection between FMIs across Europe,” said Javier Hernani, head of securities services at SIX Group, speaking exclusively to The TRADE.  

“What market participants crave is a far greater array of choice when it comes to clearing services. For instance, if an international trading firm is opening a new euro clearing account, they need to have direct access to the domestic CSDs. Providing connectivity like this is paramount to ensuring the financial stability that the BofE has outlined.” 

Going forward, the UK’s Future Regulatory Framework (currently before Parliament) is likely to step up supervisory attention, as it grants the Bank of England sole rulemaking power over CCPs and CSDs operating in the UK.  

The post Bank of England set to step up CCP and CSD supervision appeared first on The TRADE.

How did SDX get started?

The SDX project has been going on for about four years. Back in 2018 SIX Group decided that DLT blockchain technology was going to be revolutionary in the financial markets space and bring significant benefits to the financial market infrastructure (FMI) space in particular. So we decided to set up a digital securities exchange, leveraging that technology to add value to existing asset classes that were already being traded on the traditional infrastructure, with the hypothesis that in a few years’ time, this would be the infrastructure upon which all activities would eventually be conducted.  

We have built an organisation, discrete with SIX Group, connected in terms of control environment, legal etc, given independence in terms of our own technology, market and sales, and we have built out a CSD and exchange built on a permission-based private ledger technology from R3 called Corda. Then in September 2021, we got our license to operate as a CSD and exchange from Swiss regulator FINMA and went live with our first bond issuance on the platform. Since then, we have been doing a lot of work on interoperability to build that migration path for the markets to adopt the new technology, and we have also set up a separate Web3 focussed business line to provide services for institution’s activity on public blockchains and have recently gone live with an institutional grade crypto custody platform and a non-custodial staking service.  

What was the journey towards the recent digital bond issuance?  

On the FMI side, the big changes and enhancements have led up to the recent issuance of the UBS bond. Back in November last year, to issue or trade any bond on SDX you had to be a member of SDX, so to invest in a bond issued on SDX you had to have one of the SDX members as your intermediary. We have made significant strides since then to expand that investor community and increase that liquidity that a bond issuer could reach when carrying out a digital issuance on SDX. That has been achieved by the onboarding of traditional infrastructure onto SDX. That’s what triggered the ability by UBS to do the latest bond issuance. Now you can issue a digitally native bond on SDX, and it can be traded and settled on SDX, or it can be traded and settled on the traditional SIX infrastructure as well as over the counter (OTC).  

The big difference is that on SDX, you’re trading and settling a token, based on DLT technology, and trading and settlement is atomic – they are a single indivisible step. On the traditional exchange there is a T+2 settlement cycle. That offers a huge benefit – as a member of SDX, UBS can trade and settle atomically, but as an issuer, they can reach the entire community that exists on the traditional exchange as well – so there is no downside, only upside, to doing the issuances on SDX. That’s the first major step in building these vital bridges between the two worlds.  

What’s the importance of interconnectivity between traditional and digital infrastructure? 

Next year, aiming at the end of Q2, we will have onboarded SDX onto the traditional SIX infrastructure – so the other way round. At that point, we will be able to mobilise assets listed on the traditional exchange and enable them to be traded and settled atomically on SDX. At that point we will have eliminated the other downside– of there not being the whole universe of assets available on SDX that exist on the traditional infrastructure, and squared that circle, bringing that benefit to members of SDX as well. That migration path between traditional and digital is then smoothed completely.  

As well as providing this innovation around existing securities, we’re also building new markets on the platform. We did the first digital bond issuance on a regulated FMI, but in June of this year we also did the first digital equity issuance as well, as part of the private market ecosystem that we are building out. The next equity issuance will probably come in Q1 of next year.  

Was the development of SDX driven by investor demand?  

SIX Group is owned by approximately 120 banks in Switzerland, so they determine what we do. We are very much driven by the appetite amongst our member banks for creating this infrastructure, and there is tremendous excitement around adopting the benefits of atomic settlement across that community. If you think about what that means for them, it means the elimination of central clearing – because you don’t have to put up capital for clearing. You don’t have to collateralise your trade for the T+2 cycle, because that settlement happens instantaneously. And in a rising interest rate environment, both of those T+2 requirements become less and less attractive, because it just means you’re paying more and more to trade the same amount. In addition, with atomic settlement there is a huge reduction in the need for reconciliation, because the trades are happening immediately, so there is less requirement for middle- and back-office reconciliation.  

There’s a significant reduction in capital allocation and overall costs associated with today’s trading, within this DLT infrastructure. That’s incredibly attractive as a benefit already, and then on top of that, you’ve eliminated risk associated with the settlement cycle, because it happens instantaneously. The cost of settlement failures is extremely high, it runs into the billions of dollars every year. The overall settlement cost of securities transactions globally is something in the region of $30 billion, not even including the cost of doing other activities associated with that, like cross-border payments, which is now over $100 billion per annum. There are efficiencies, risk reductions, and cost savings associated with leveraging DLT infrastructure. But there has to be this migration path. UBS couldn’t have done an issuance on the platform without being able to reach all the liquidity that they could on the traditional infrastructure. Thus, the bridge that we’re putting into place – so you can do a digital issuance but reach investors on both sides.   

What are your plans for the future? 

This is a long-term play. SIX Group sees this as being the infrastructure of the future, and it’s taken us decades to get to where we are today, with the current electronification of the capital markets. It will not take us decades to get to DLT-based infrastructure in the future, but it is a multi-year process that requires very substantial and robust foundations. This isn’t a get-rich quick scheme. It’s about building something robust, regulated, and transparent.  

We’re onboarding more members, including Berner Kantonalbank (BEKB) off the back of the recent private equity issuance, and three other banks are also in the pipeline going through the initial AML/KYC process. 

Onboarding onto an FMI is a rather longer process. Compared to an unregulated platform, which you can do in an afternoon, these take multiple months to complete, both in terms of legal and compliance, integration and conformance testing. So we will onboard members at a relatively steady pace. If we get to double digits in a year, that would be great. That’s why the bridge is helpful as an intermediary step – to help those are already on board to issue instruments, which then encourage others to join. It’s now a question of getting the 100+ members of the traditional exchange and CSD to become members on SDX.  

What impact has the FTX chaos had on your operations?  

Could we have predicted that FTX would be the next shoe to drop? No. But I don’t think anyone was in any doubt that there was more to come, in terms of the shake-out of that crypto native space. The problems we are seeing there today are very much CeFi problems, but they are CeFi problems on steroids, because of the lack of regulation. Whether it’s a lack of transparency, or due diligence between counterparties, or clarity of service offerings such as custody – they aren’t related to the underlying technology, they’re totally unrelated to blockchain and DLT. In fact, decentralised exchanges are being used as examples where in fact there haven’t been any issues, because when using the technology “naked” (as it were), it works very effectively. These issues are associated with a repeat of the same sort of challenges we had back in 2000 with the dot com collapse, or 2008 – where people behaved badly because they could hide what they were doing because of a lack of transparency, accountability and regulation in the marketplace.  

If there is anything good that comes out of the FTX downfall, it will be to highlight the importance of trusted counterparties, transparency, clarity, and well-thought-out regulation.  

It’s key that not all regulation is the same across jurisdictions. SIX Group has got to where it is today with SDX because the regulation in Switzerland is very clear and quite advanced – the regulatory environment lends itself very well to the use of DLT. What’s missing globally, however, is clarity around custody. Globally, there needs to be regulatory clarity about what it means to provide custody and – crucially – a separation of duties between exchange and custody.  

What we’ve seen in a lot of instances is the segregation of funds issue – that’s reappearing as a challenge, and we don’t yet have the investor protection that you see in other asset classes, which is holding back trust and therefore, inevitably, adoption.  

The post Fireside Friday with… SDX’s David Newns appeared first on The TRADE.

FINMA says that it recognises the innovative potential of new technologies for the financial markets. In order to facilitate serious innovation, it applies the existing provisions of financial market law in a consistently technology-neutral way, i.e., in keeping with the “same risks, same rules” principle,” the supervisor said in a statement. 

Under Swiss law, business models for the multilateral trading or settlement of DLT-based securities can be approved in one of two ways: in the traditional form under the Financial Market Infrastructure Act (FMIA), whereby the corresponding offering will only be open to supervised financial institutions; or, alternatively, as a DLT trading facility under the DLT Act, which allows organisations to obtain a single licence for the trading and settlement of DLT securities. 

The licences granted to SDX are in the framework of the FMIA and their offering is aimed at supervised financial institutions. 

“This authorisation enables SDX to go live with a fully regulated, integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital securities. With these licenses, SDX can now offer the highest Swiss standards of oversight and regulation,” commented a spokesperson for SIX, of which SDX is part.

“Over the coming months and years, SIX Digital Exchange will continue to invest in building out the digital financial ecosystem to create a global liquidity network for digital assets by engaging in cooperative ventures with partners and accelerating the onboarding of various global and local financial players. As this international customer base expands to include banks, issuers, insurance firms, institutional investors, the members of SDX will create a global exchange network for digital assets, unlocking global liquidity based on distributed ledger technology.”

Thomas Zeeb, global head, exchanges & member of the executive board, SIX, noted that, “The digitalisation of financial markets continues apace, and while the final shape of the market is still evolving, this is an important milestone in providing institutional investors with a safe and robust infrastructure meeting all of the core requirements of a traditional exchange and CSD infrastructure.” 

He described the approval as an important milestone in bringing the digitalisation of capital markets into the mainstream, but added that, “It is only the beginning. We will continue to work with our clients, regulators, and other stakeholders to shape the markets of the future.”

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The pan-European would have to offer at least €4 billion for the bid to be successful, according to reports.

“Euronext confirms it is currently in discussions with Cassa Depositi e Prestiti Equity (“CDP Equity”) to submit an offer to London Stock Exchange Group plc for the acquisition of the business and key operational assets of Borsa Italiana,” Euronext said in a statement.

Euronext will have to face off with rival European exchange groups Deutsche Börse and SIX Group, both of which have also been considering making an offer, according to a report from Bloomberg.

SIX most recently closed its acquisition of Spanish exchange group BME, while Deutsche Börse’s CEO, Theodor Weimer, stated earlier this year that acquisitions will play a major role in its strategy. Similarly, in March, SIX said via its 2019 annual report that it would look to acquisitions in the near future as a means of growth.

Meanwhile, Euronext recently completed its takeover of Danish central securities depository (CSD) VP Securities for €150 million, and is currently integrating the Oslo Børs markets onto its trading systems. Euronext entered into a bidding war with US exchange group Nasdaq to secure its acquisition of the Norwegian stock exchange early last year.

LSEG previously stated it is considering offloading Borsa Italiana and its Italian fixed income trading business, MTS, as it looks to alleviate competition concerns raised by the European Commission about it’s the proposed $27 billion acquisition of Refinitiv.

The Commission said the combination of LSEG’s MTS platform and Refinitiv’s Tradebweb 54% interest will significantly increase their market share in electronic trading of European government bonds.

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Upon announcing its first half 2020 results, SIX stated that the ongoing operational and strategic integration of the Spanish bourse will be a focus for the exchange throughout the rest of the year.

“The integration of BME and SIX, two leaders in their domestic financial markets, creates a more diversified group with a strong presence across Europe, making it the third largest European financial market infrastructure group, and the 10th largest globally by revenue,” SIX said.

As the deal closed in June, SIX acquired a 93.16% controlling stake in BME. Until 5 September, the remaining 6.84% shareholders of BME will have the opportunity to sell their shares to SIX for €32.98, the same price per share at which SIX bought the majority stake.

Shortly after SIX confirmed its intensions to acquire BME in November, pan-European exchange operator Euronext said it was also in talks to acquire BME. By March, Euronext stated it would not make a bid for BME, as SIX received various regulatory approvals for the takeover from authorities in Spain.

SIX confirmed through its 2019 report published earlier this year that it will continue to look for opportunities to acquire other market infrastructure providers, and that it has sufficient funding to do so.

“As a profit-oriented company, SIX aims not only at completing its task as a financial market infrastructure provider, but also at generating sustainable profit,” SIX Group said in the report. “To continue improving its own efficiency and fulfil its mandate in an increasingly competitive environment in the long run, SIX intends to grow both organically and through acquisitions.”

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