by Melanie Best
EuroCCP has launched a new service offering central counterparty (CCP) clearing of trades in U.S. stocks and U.S. exchange-traded funds (ETFs) to European trading firms. EuroCCP is the first European equities CCP to clear U.S. securities and settle them directly in the central securities depository (CSD) in their home market of issue, The Depository Trust Company (DTC).
EuroCCP’s new service gives European trading firms their first-ever opportunity to trade U.S. securities on a variety of pan-European platforms during European trading hours and to settle those trades in DTC. By offering a service where U.S. securities settle directly at the U.S. CSD, EuroCCP provides European trading firms with a more cost-effective post-trade solution than was previously available.
Extending the benefits
EuroCCP’s clearing service for U.S. issues allows it to extend the efficiency, cost-saving and counterparty-risk-protection benefits it already provides to clients’ European-listed securities transactions to U.S. stock and U.S. ETF transactions. Initially, the U.S. securities eligible for clearing through EuroCCP include approximately 100 stock issues and 50 ETFs. EuroCCP expects, over time, to expand the scope of eligible instruments to further equities and ETFs, and to American Depositary Receipts (ADRs).
– Andrew Simpson, EuroCCP's head of Product Management in London
EuroCCP’s clearing service for eligible U.S. issues is open to any trading venue cleared by EuroCCP that offers trading in the securities. Trading will be against U.S. dollars.
“With our new service, we expect to encourage the development of liquidity in U.S. equities in Europe. European trading firms will have a centralized clearing solution to facilitate their trading of U.S. securities on multiple European trading venues,” said Andrew Simpson, EuroCCP’s head of Product Management in London. “We are leading the way by providing European investors with the most compre-hensive array of central counterparty services on a single post-trade platform – and at the same time offering a lower-cost settlement alternative than previously available to firms trading in Europe.
We’re focused on delivering services that reflect the demands of firms, making it easier to build trading strategies across multiple asset classes – U.S. and European equities issues, global depositary receipts and exchange-traded funds – and driving down post-trade costs.”
Serving 19 markets
The new service increases the number of markets cleared by EuroCCP to 19, more than any other European equities CCP. This service extension marks the latest in an ongoing series of enhancements EuroCCP is bringing to Europe’s clearing space, and demonstrates EuroCCP’s commitment to support the European trading community with a cost-effective, creative clearing solution that best addresses firms’ trading needs and business aspirations.
For more on EuroCCP, visit www.euroccp.co.uk. @