Euroclear, Clearstream International and The Depository Trust & Clearing Corporation (DTCC) announced today that they had joined forces to launch a new service designed to automate the pre-issuance information processing and ISIN allocation for new issues of European commercial paper (ECP) and related money-market instruments.
The new service, called European Pre-Issuance Messaging (EPIM), is a central messaging hub, linking the parties involved in the issuance of European commercial paper, including banks, dealers, issuing and paying agents, securities depositories and numbering agencies.
Major ECP dealers, as well as issuing and paying agents, have already committed to use EPIM. Bank One and Goldman Sachs are the first customers to use the service, with JP Morgan Chase and Morgan Stanley to follow shortly thereafter. Other organisations committed include Barclays Capital, Citibank NA, Credit Suisse First Boston, Deutsche Bank, HSBC, Lehman Brothers and UBS.
According to Scott Barringer, Head of European Money Markets of Goldman Sachs : “In the money markets where speed is critical, EPIM facilitates the safe, efficient exchange of issuance information through a centralised system. This innovative solution brings us closer to achieving full straight-through processing in the European commercial paper marketplace.”
Fuelled by the introduction of the euro, the ECP market represents one of the fastest growing segments in the international capital markets, reaching EUR 277 billion at the end of 2001 from EUR 145 billion in 1998.
EPIM is based on a service developed by the DTCC and launched in the United States in 1999. Same-day settlement has been instrumental in the emergence of a $1.5 trillion U.S. commercial paper market.
Andre Roelants, president & CEO of Clearstream International, says:”This new service represents another key element of our program of customer-focused improvement initiatives and illustrates once again our determination to reduce costs and inefficiencies throughout the trading, clearing and settlement process. Our role as one of the major key providers for the securities industry enables Clearstream to implement this type of service to support the growth of the European commercial paper market.”
Pierre Francotte, chief executive officer of Euroclear Bank, commented:
“EPIM will be of particular benefit to Euroclear’s clients and will help to sustain the growth of the ECP market in this uncertain, post-Enron environment by eliminating ECP market inefficiencies and reducing costs for users.”
Jill M. Considine, chairman and CEO of DTCC said:
“We are delighted to be teaming with Clearstream and Euroclear and to leverage technology we created for the U.S. commercial paper market. Our experience is that by bringing greater efficiency, we can cut the cost, time and risk of issuing these short-term securities and improve service for customers.”