SmartPool Selects EuroCCP for Clearing and Settlement
SmartPool, a pan-European electronic block trading platform created by NYSE Euronext, HSBC and BNP Paribas, announced that it has selected EuroCCP and LCH.Clearnet SA as its clearing and settlement service providers.
SmartPool is the second multilateral trading facility (MTF) to select EuroCCP for clearing and settlement. Turquoise named EuroCCP to do clearing and settlement for its trading platform in 2007.
Both EuroCCP and LCH.Clearnet SA will support trading of European stocks offered on the SmartPool platform. They will act as central counterparties (CCPs), enabling anonymous post-trade processing, providing netting and a full range of risk management services to SmartPool. Citi’s global transaction services business will act as EuroCCP’s settlement agent and handle settlement in the respective central securities depositories (CSDs).
An ‘open’ model
SmartPool is a new MTF providing a dark pool for the execution of large institutional order flow in stocks from 14 European countries. The announced partnerships enable SmartPool to take a significant step closer to the delivery of the trading platform planned for after the summer, subject to regulatory approval.
“EuroCCP is thrilled to be chosen by SmartPool to support this multilateral trading facility,” said Diana Chan, EuroCCP’s CEO. “We believe as we extend EuroCCP’s reach to a broader population of European trading platforms such as SmartPool, all financial firms – and end-investors – will benefit from the economies of scale that come from increased volumes that clear and settle through our platform.”
“As CCP for Euronext’s markets, we welcome this agreement to support SmartPool, which underlines our desire and capacity to clear new markets and to respond to new initiatives introduced by the Markets in Financial Instruments Directive [MiFID]. We hope that our clients will enjoy substantial economies as we will set up offsetting at-risk and settlement levels between SmartPool and Euronext’s markets,” added Christophe Hémon, LCH.Clearnet SA’s CEO.
“SmartPool’s unique ‘open’ business model, whereby we have agreements with two clearing providers, enables us to offer our future customers the most appropriate, competitive and attractive services and environment for the trading of European stocks. By offering a combination of EuroCCP/Citi and LCH.Clearnet we have selected the most efficient, low-cost clearing solution for SmartPool customers,” said Roland Bellegarde, head of European cash markets at NYSE Euronext.
Breakdown of the business
LCH.Clearnet SA, as Euronext’s contracted CCP, will provide clearing services for stocks listed in the four Euronext markets: Amsterdam, Brussels, Lisbon and Paris. Settlement will be provided through the local CSDs.
EuroCCP will provide services for the stocks traded in 10 other European countries: Austria, Denmark, Finland, Germany, Ireland, Italy, Norway, Sweden, Switzerland and the U.K.
EuroCCP is headquartered in London and is a “Recognised Clearing House” regulated by the Financial Services Authority (FSA). LCH.Clearnet SA, a wholly-owned subsidiary of LCH.Clearnet Group Ltd, is headquartered in Paris and is regulated as a bank and as a clearing house by French banking and market regulators, in co-ordination with the regulators of each country in which Euronext operates an exchange. Both CCPs have signed the European Code of Conduct governing clearing and settlement.
More on SmartPool
SmartPool will be an MTF, providing a dark pool for the execution of large institutional order flow, registered in the U.K. and supervised by the FSA. It was created by NYSE Euronext in partnership with BNP Paribas and HSBC and in response to the European Union’s MiFID, introduced on Nov. 1, 2007.
Headquartered in London, SmartPool will have its own management team and an independent board of directors. @