The Irish Stock Exchange (ISE) has launched a central counterparty system in a move that is hoped will boost liquidity and provide greater anonymity to those trading in the Irish market. Eurex Clearing, a subsidiary of Deutsche Börse, is acting as the central counterparty (CCP) in the Irish market, becoming buyer to every sale and seller to every purchase of shares.

The new system, which has been under development since February, went into operation on Monday. According to Brian Healy, director of trading and regulation at the ISE, one of the big advantages of the new system is that it introduces post-trade anonymity.

This is because stockbrokers submitting an order will be unaware of the identity of the counterparty on the other side of the trade as both sides will deal only with the CCP.

According to the ISE, in markets served by a CCP, such as the UK and Germany, liquidity has been boosted as a result.

Irish dealers welcomed the introduction of the system, noting that the Irish market has lost business to London in recent years as a result of the lack of anonymity.

The exchange says the system has reduced counterparty risk as participants have less exposure to counterparty default, as the CCP effectively guarantees the settlement of all eligible trades.

Eurex Clearing already provides a similar service to the Frankfurt Stock Exchange and to Eurex, the derivatives exchange.