LCH.Clearnet EquityClear will be reducing their clearing fees. These reductions will come into effect on 1 November 2006. The reductions reflect the growth in cleared volumes, and represent the first stage in an ongoing programme of tariff reduction for clearing cash equities.
As with all central counterparties, marginal costs are relatively low. As a consequence, LCH.Clearnet is undertaking a review of its tariffs, with a view to introducing a pricing structure which will better reflect the structure of their cost base, hence including a greater concentration on discounting fees at high levels of activity. The review is expected to be complete by the end of 2006.
From 1 November there will be a 6 percent reduction in clearing fees on trades executed on LSE SETS, SETSmm, and on all trades executed on virt-x. There will be a further 20 percent reduction on clearing fees charged on the top 20 percent of trades executed on LSE SETS, SETSmm and virt-x UK and Irish business. This will make an overall reduction of 26 percent in clearing on this top trading segment.
“LCH.Clearnet is committed to driving fees downwards, and these reductions are clear evidence of our determination to set tariffs that are reasonable and competitive, whilst ensuring that we can continue to deliver high quality clearing services to this and all our other market segments,” says Roger Liddell, the Group Chief Executive of LCH.Clearnet. “We expect to make a further announcement in the near future relating to other equity market clearing fees. Together, they will constitute an interim measure, paving the way for a fully comprehensive review to be announced at the end of the year.”