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Jul 31, 2013 • DTCC Connection

Sale and Purchase Agreement Signed to Combine EMCF and EuroCCP

EMCF EUROCCP Logo

EMCF and EuroCCP took an important step toward delivering efficient clearing services to the pan-European financial community by signing a sale and purchase agreement to create EuroCCP N.V., the new cash equities clearing house. (See “EuroCCP and EMCF Combine Strengths in Pan-European Cash Equities Clearing,” @dtcc, April 2013).

EMCF and EuroCCP clients have been very supportive of this initiative as they see significant benefits to be delivered from:

  • Substantial settlement cost savings resulting from increased settlement netting and reduced inter-CCP settlements;
  • Sustainable low cost clearing with a single cost base;
  • Reduced collateral obligations as a result of portfolio margining and single guarantee and interoperability funds;
  • Single set of membership and connectivity fees; and
  • Superior customer service, risk management, IT and operations as a result of the combination.

The combined CCP will be clearing for NASDAQ OMX Nordic exchanges, all pan-European multilateral trading facilities and other trading and matching platforms. Most of the platforms will be cleared via interoperability with other CCPs in order to maintain competition in the marketplace and provide users with a choice of CCP.

“The unification of EuroCCP and EMCF is a welcome achievement in the Nordic financial community," said Tomas Engel, Product Owner Clearing Services, SEB Merchant Banking, "because it brings the best features of both companies to the Nordic financial marketplace under one roof."

“The European trading landscape has changed dramatically since the introduction of MiFID in 2007, said Andrew Bowley, Head of Business Operations & Risk, Instinet Europe. “EuroCCP has played a key role, from facilitating the launch of new venues at the outset to more recently helping to drive the meaningful introduction of interoperability. The model has been successful, allowing for fragmented trading to be brought together post trade, and EuroCCP has cleared a significant proportion of our flow.

“The integration with EMCF will take this to a new level - creating economies of scale through the combination of the two platforms, and creating a sustainable future,” Bowley added. “I believe we will also see more activity around OTC trade intermediation with less contention of duplicated efforts around these two CCPs.”

“EuroCCP N.V. will unite the core strengths of EuroCCP and EMCF into one clearing house,” said Jeffrey King, Managing Director, Securities & Fund Services, Custody Global Product Development, Citibank N.A. “This transaction is ideal for the pan-European financial marketplace because it creates a clearing house that will deliver high-quality customer service and operational efficiency.”

EuroCCP N.V. will be headquartered in Amsterdam with customer-facing functions located in London and Nordic coverage provided from Stockholm.

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