EuroCCP Introduces Cross-Platform Netting for UK and Irish Stock

EuroCCP has introduced a cross platform netting service for UK and Irish stock.

From Monday Aug. 12 2013, the service will enable trades in the same security on the same day executed by a trading firm to be netted into a single settlement obligation on all the multilateral trading facilities for which EuroCCP clears.

The service has recently received regulatory approval from the Financial Conduct Authority and the Bank of England. Up until now, firms trading the same UK or Irish stock on multiple MTFs had to settle the net obligation from trades on each MTF separately. By using the cross-platform netting service, says EuroCCP, firms that trade the same UK or Irish stock on two MTFs immediately realize 50% savings in settlement costs; if they trade the same stock on three MTFs they realize 67% savings, and so on.

EuroCCP has five customers signed up to use the service. Savings expected to be delivered to EuroCCP participants are estimated at between €1.4 to €2.0 million per year.

Commenting on the launch of the service, Diana Chan, CEO, EuroCCP, said: “Delivering the benefits of cross-platform netting is another example of EuroCCP’s dedication to meeting customer needs. The rapid take-up from our customers for this service illustrates the focus of trading firms on reducing settlement and other post-trade costs.”

“Cross-platform netting is an essential prerequisite to realising the full benefits of a pan-European equities trading market. Settlement obligations for trading firms are reduced into a single net receipt or delivery per day for each UK and Irish security traded, regardless of the number of trades and the number of MTFs that firms execute trades on.”