EuroCCP, the pan-European cash equities clearinghouse, announced the launch of a new service that will be offered with Turquoise, the provider of pan-European lit and dark equity trading, and will take advantage of recent reforms to the clearing and settlement of trades in Spanish equities and reduce costs for investors.
The reforms, known as Title V, facilitate the trading of Spanish equities on multilateral trading facilities by modifying the regulations governing Iberclear, the Spanish central securities depository, and simplifying settlement and registration processes relating to the sale and purchase of Spanish equities.
In the future, transactions that are subject to Title V may be settled bilaterally, without the participation of the stock exchange.
Title V also removes the requirement for clearinghouses such as EuroCCP to cross positions on the local exchange with a local broker.
By utilizing the new securities settlement and registration procedures authorized by Title V, the new service offered by EuroCCP with Turquoise will significantly reduce the operational costs of trading Spanish equities on Turquoise.
From May 3, 2011, the EuroCCP settlement fee for Spanish securities will be reduced from the current €2.42 to €1.00 and the EuroCCP clearing fee will be reduced from €0.07 per side to €0.03 per side, up to 100,000 sides on a participant’s average daily volume.
Competition and liquidity
Diana Chan, CEO of EuroCCP, said, “Spain is home to some of the most liquid stocks in Europe but Spain’s post-trade infrastructure rules have, to date, prevented the evolution of the type of competitive markets that have helped drive transaction volumes in other parts of Europe. The Title V reforms, coupled with other initiatives currently under discussion, should help address this anomaly, resulting in more competition and increased liquidity for Spanish stocks.”
Adrian Farnham, COO of Turquoise, said, “We are delighted that the changes announced today will enable our clients to trade Spanish stocks in the most cost-effective way through Turquoise. These changes will allow trading firms and investors to benefit from a number of efficiencies, including the very competitive clearing fees offered by EuroCCP. ”
In conjunction with these changes, from May 3, Turquoise will offer a three-month pricing promotion for trading Spanish stocks on its Integrated Order Book or until daily consideration reaches €100 million. During this period, the “take” fee will be reduced to zero, while the “maker” rebate will be unchanged at 0.2 basis points.@