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EuroCCP, a longstanding proponent of interoperability and competition in European clearing, is making headway in the region. The company is adding two new platforms, including the first nationally regulated exchange.

“With wider adoption of interoperability across all trading venues, including regulated markets, the European equities trading landscape will be transformed,” said Diana Chan, CEO of EuroCCP. “We expect interoperability to bring a significant reduction in the post-trade frictional costs that have been a major obstacle to growth in equity trading in Europe.”

Peter Randall, CEO of Equiduct

The numbers reflect the speed at which the concept of competitive clearing is gaining ground. Estimates indicate that in April 2012, more than 60% of market volume in Europe was cleared by at least one of the region’s four interoperable clearing houses.

Latest on board

Equiduct, a pan-European trading platform and best execution service, operated by the regulated market Boerse Berlin, has selected EuroCCP to provide interoperable CCP clearing. This marked a breakthrough as Equiduct will be the first nationally regulated exchange to offer interoperable clearing with multiple CCPs.

“We are at a very important stage in the evolution of our business and so we constantly need to diversify and strengthen the service we provide to our users,” said Peter Randall, CEO of Equiduct. “In response to a growing customer demand, we are pleased to be able to do this with the launch of interoperable clearing with EuroCCP.” The launch date, which is subject to regulatory approval, is scheduled for July 6, 2012.

In the Nordic region, EuroCCP moved a step closer to introducing genuine competition in the clearing of Nordic securities by securing a mandate to provide interoperable CCP clearing to Burgundy, a Nordic multilateral trading facility (MTF). The launch is scheduled for June 28, 2012, subject to regulatory approval.

Customer-focused model

EuroCCP’s view of the European clearing market is that, by offering trading firms a choice when selecting a central counterparty (CCP) to clear their trades, firms will gain benefits including reduced funding and settlement costs, improve-ments in service quality and greater innovation.

EuroCCP has been making steady progress in introducing competitive clearing to trading firms and platforms in Europe since receiving authorization from the U.K.’s Financial Services Authority to launch the Preferred Interoperable Clearing Service in 2011.

The company has seen its volume of cleared transactions triple since introducing full interoperable clearing on the BATS Europe and Chi-X Europe platforms in January 2012, and volumes are expected to increase further as more clients consolidate their clearing with EuroCCP.

“Interoperable clearing marks a new chapter in the development of Europe’s market infrastructure supporting equity trading, and EuroCCP believes this is just the beginning,” said Chan. “When all interoperating CCPs get equivalent access to all the trading venues they clear for, trading firms will finally enjoy the full benefits of true competition.” @