European Central Counterparty Limited (EuroCCP) has begun clearing for the NYSE Arca Europe multilateral trading platform.
NYSE Arca Europe will trade securities in 11 markets across Europe, in all of which EuroCCP already provides clearing and settlement services. EuroCCP has also been clearing since February for NYSE Euronext’s SmartPool platform, a new exchange-led, European dark pool for block trading owned by NYSE Euronext, HSBC, BNP Paribas and JPMorgan.
EuroCCP currently provides clearing and settlement services on a pan-European basis in 15 major national markets in Europe, including Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland, Sweden and Spain. Settlement through EuroCCP can be done in seven currencies: the euro, British pound, U.S. dollar, Swiss franc, Danish krone, Swedish krona, and Norwegian krone. EuroCCP entered the European clearing arena in March 2007, when it won the appointment of Turquoise, a multilateral trading facility. Turquoise started trading in August 2008.
Trades that are executed on any of the platforms EuroCCP clears for can be netted for settlement (except for the UK and Ireland) and margin purposes, thereby reducing the overall cost of clearing and settlement. EuroCCP currently nets off 99% of all transactions processed.
The incremental volumes brought to EuroCCP by NYSE Arca Europe are expected to push EuroCCP transaction volumes above the first volume discount threshold, which will result in a fee reduction for all EuroCCP clearing participants. Once a volume threshold has been surpassed, trades on any EuroCCP-supported platform by any clearing participant benefit from the volume discount.
“NYSE Arca Europe’s platform is expected to attract substantial volumes from high-frequency traders,” says Diana Chan, CEO of EuroCCP. “We expect that EuroCCP will offer the ideal clearing solution for such traders that will minimize their costs. EuroCCP is uniquely built for safe and low-cost clearing using an ‘at-cost’ model and taking advantages of the expertise and economies of scale provided by our parent.”
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