History of Oslo Clearing

Oslo Clearing ASA was a Norwegian central counterparty (CCP) clearing house headquartered in Oslo, best known as the dedicated clearer for trades executed on the Oslo Stock Exchange (Oslo Børs). For most of its existence it operated as a subsidiary within the Oslo Børs VPS Holding group, sitting alongside the exchange itself, the Norwegian central securities depository (Verdipapirsentralen, or VPS), and Oslo Market Solutions.

Oslo Clearing was licensed to operate as a clearing house for derivatives and equity instruments, as well as for borrowing and lending of financial instruments MarketScreener. In practice, that meant it performed the classic functions of a CCP: stepping into the middle of trades between buyers and sellers so that each side faced Oslo Clearing rather than each other, novating contracts, calculating and collecting margin, managing default risk through a clearing fund, and handling the netting and settlement instructions that flowed downstream to VPS for securities and to cash banks for payment.

The company's roots trace back to the derivatives clearing operation that Oslo Børs had run for many years for standardized equity options and futures on Norwegian single stocks and on the OBX index (the basket of the 25 most liquid shares on the exchange). It was carved out as a stand-alone licensed clearing house so that the group could meet the regulatory expectation, increasingly emphasized in Europe after the 2008 financial crisis and codified in EMIR, that clearing be conducted by separately authorized entities with their own capital and risk frameworks. In 2010, Oslo Clearing also took on central counterparty clearing for cash equities traded on Oslo Børs and Oslo Axess, replacing a model in which equity trades had largely settled bilaterally. Alongside this, it ran a securities lending and borrowing service that allowed members to cover short positions and settlement fails.

Its members were the Norwegian and international banks and brokers active on Oslo Børs, and its product scope remained relatively narrow compared with the large pan-European CCPs: Norwegian listed equities, ETFs, and equity derivatives, rather than interest rate swaps, commodities, or fixed income repo.

Oslo Clearing's independent life was short. Faced with the cost of competing as a small, single-market CCP in a consolidating European post-trade landscape, its parent decided to sell. In December 2012, SIX Group agreed to acquire 100 percent of Oslo Clearing from Oslo Børs for NOK 180 million (approximately $32 million), and the deal was completed in 2014. After the acquisition, the business was folded into the Swiss group's clearing arm, SIX x-clear, which then provided central counterparty services to the Oslo market under its own brand. In 2014, the Oslo Clearing name was effectively retired, but the function it had performed — guaranteeing and risk-managing trades on Norway's main exchange — continued under new ownership as part of a larger, multi-market European clearer.