EuroCCP Customers Get Their Own Online Fee Calculator
Shortly after it introduced U.S.-level high-volume pricing to Europe in October, EuroCCP added a fee calculator to its website, to enable trading firms to estimate their monthly clearing costs at varying volume levels using the firm’s new tiered prices.
The online tool promotes one of EuroCCP’s key objectives: to simplify pricing for customers and make costs more transparent.
“Trading firms want to be able to build predictable clearing costs into their models, so we’ve focused on delivering a pricing schedule that’s easy to understand and has no hidden fees,” said Andrew Simpson, EuroCCP’s head of Product Management/London. “With the launch of our online calculator, we’re reinforcing the message that EuroCCP listens to customers and puts a high value on transparency.”
Tiered pricing made easy
EuroCCP provides pan-European clearance and settlement services for equities and Depositary Receipts traded on a variety of trading platforms. EuroCCP’s three-tier pricing schedule provides an incentive for firms to increase their volumes. This scheme is responsive to current trends in trading, specifically the growth of high-frequency trading strategies and the desire by many firms to concentrate their volumes for clearing purposes in order to reap economies of scale in post-trade processing.
Using the fee calculator, existing customers looking to increase their volume flow through EuroCCP, as well as firms looking to become EuroCCP customers, have a fast and easy way to estimate their clearing costs.
“This interactive tool is aimed at helping firms test different volume scenarios,” said Simpson. “We believe it will also support potential customers, letting them discover how much they can save by bringing their business to EuroCCP.”
How it works
EuroCCP’s fee simulator leverages technology DTCC implemented in June to create a similar calculator for National Securities Clearing Corporation's U.S. equities clearing fees.
A user inputs the number of business days in a month and the number of trade sides (that is, the buy or sell position of a transaction). The tool responds with estimated daily and monthly EuroCCP clearing costs – denominated in euros – as well as the estimated average fee per side. It also breaks out the volume and cost information by pricing tier.
Under EuroCCP's new fee schedule, the lowest volumes (0 to 100,000 sides) are priced at 3 euro cents (? 0.030) per side, mid-tier volumes (100,001 to 500,000 sides) are charged 1 euro cent (? 0.010) per side, and the highest volumes (500,001 sides and above) are priced at one-fifth of a euro cent (? 0.002) per side.
This third-tier price is Europe's lowest clearing price. Market participants are expected to continue pressing trading platforms to provide them with the competitive advantage of clearing through EuroCCP.
EuroCCP clears trades in 15 European markets in more than 5,000 equity issues in Europe and 120 listed Depositary Receipts. EuroCCP currently provides central counterparty services for equity trades on the Turquoise, SmartPool, NYSE Arca Europe and Pipeline trading platforms.
To access the fee simulator, go to euroccp.co.uk/participant/fee_calculator.php.
To view EuroCCP's fee schedule, go to euroccp.co.uk/docs/EuroCCP_Fee_Schedule.pdf. @