DTCC Connection

Jul 02, 2012 • DTCC Connection

DTCC Drives Dialogue On Market Structure in Europe

Signalling DTCC’s rising profile in Europe in the equities clearing and over-the-counter (OTC) derivatives spaces, EuroCCP and DTCC Deriv/SERV exhibited side-by-side for the first time at Europe’s largest trading and technology event, TradeTech. The CEOs of both organizations participated in panels at the event, which took place in London on April 25-26.


EuroCCP also used TradeTech as a forum to launch a new white paper titled “State of the European Equity Markets.”


State of the markets

The EuroCCP white paper addresses the challenges and opportunities that underpin the creation of an efficient trading environment for European equities within the common market. In particular, it focuses on the remaining obstacles to full interoperability in Europe.


One of the most significant issues discussed is the reticence of trading venues that own or have financial control over a central counterparty (CCP) to embrace interoperability. Such venues have no obvious incentive to allow a third-party CCP to share in the clearing revenues from which they benefit unless trading firms put significant pressure on them to demand interoperability. They do, however, risk seeing a liquidity shift away to a competing trading venue supporting interoperability.


“It is hoped that once other trading venues see the success of interoperability, they will embrace it to ensure that they remain competitive,” said Diana Chan, CEO of EuroCCP. “It is only once all interoperating CCPs get equivalent access to all the trading venues they clear for that trading firms can fully realize the benefits of true competition – better service, lower prices and more responsive innovation.”


To access the white paper, visit www.euroccp.co.uk/leadership/overview_clearing.php.


TradeTech panels

Stewart Macbeth, President and CEO, DTCC Deriv/SERV, contributed to a lively discussion about how regulation is impacting a variety of market partic-ipants. He was joined on the panel by industry experts from across Europe: Christian Katz, CEO, SIX Swiss Exchange; Diego Valiante, Head of Research, ECMI; Guillaume Lemarchand, Global Head of Global Execution Services and Chairman, BNP Paribas Equities France; Tim Rowe, Manager, Trading Platforms and Settlement Policy, Financial Services Authority; and Ann Neidenbach, SVP, Global Technology Services, NASDAQ OMX.


Chan participated in a panel that gave insights on the topic of navigating dark liquidity pools in the global markets. Other panelists included leading industry figures such as Pinar Emirdag, Professional Business Development, London Stock Exchange, and Lee Hodgkinson, CEO of SmartPool.


Client briefing

In a separate event, EuroCCP held the second in a series of informal breakfast briefings for clients and contacts to provide insights on market structure issues on May 17. The briefings bring together senior industry figures who give their views on a range of topics. (They are conducted under the Chatham House Rules, which establish the confidentiality of the discussions.)


Jon Ross, CEO, GETCO Execution Services, and Kee-Meng Tan, Managing Director, Knight Capital Europe, spoke at the most recent briefing. Niki Beattie, CEO, Market Structure Partners, moderated the event.


Topics discussed included the evolution of the market structure in Europe; expectations for post-trade processing and clearing; the progress of interoperability and the next frontier; and the role and influence of trading firms on the decision-making process of market infrastructure. The panelists also commented on the challenges and expected impact of the new regulations on the cash equities markets. @


To learn more about these briefings, contact Lilia Tira, Head of Marketing, EuroCCP, at ltira@euroccp.co.uk.


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