Recent studies have found that post-trading processing costs in the E.U. are higher than in the U.S., both for E.U.-domestic and cross-border transactions.

While DTCC has, on request, contributed data to various comparative cost studies, we have not sought to draw our own comparisons. As the European Commission pointed out in its working paper draft about post-trading, many assumptions impact this calculation, and it is difficult to achieve a true comparison.

The Commission analyzed the studies, which include CEPS, Giovannini I, LSE/Oxera, NERA Economic Consulting, AFTI/Eurogroup, among others, and concluded that:

• In the E.U. market, a cross-border equity transaction is two-to-six times more expensive than a domestic transaction from an investor's point of view.
• A domestic transaction is up to eight times more expensive in the E.U. post-trading environment than at DTCC.
• The studies show that the aggregate excess cost of post-trading for investors in the E.U. is between 2 billion and 5 billion.

According to DTCC's estimate, clearing an equity trade in the U.S. market now costs about USD2.0 cents (0.015) per side, after rebates and discounts. These calculations are less than estimates by the European studies because they rely on different assumptions (e.g., average trade size, inclusion of rebates and discounts).