Monday, 12 August 2013
Pan-European cash equities clearing house EuroCCP has launched a new service which nets trades in the same security on the same day into a single settlement obligation on all the MTFs for which EuroCCP clears.
The service has already received regulatory approval from the Financial Conduct Authority and the Bank of England as well as agreement by the HMRC. From today, EuroCCP customers will be able to use the platform in UK and Irish stock.
Up until now, firms trading the same UK or Irish stock on multiple MTFs had to settle the net obligation from trades on each MTF separately. By using the cross-platform netting service, EuroCCP claims firms that trade the same UK or Irish stock on two MTFs will realise 50% savings in settlement costs; if they trade the same stock on three MTFs they realise 67% savings.
EuroCCP already has five customers signed up to use the service and more are expected in the coming days. The platform is expected to deliver substantial annual savings to EuroCCP Participants, estimated at between €1.4 to €2m per year. Netting also reduces the value of settlement obligations and the associated risks.
"Delivering the benefits of cross-platform netting is another example of EuroCCP's dedication to meeting customer needs,” says Diana Chan, chief executive officer, EuroCCP. “The rapid take-up from our customers for this service illustrates the focus of trading firms on reducing settlement and other post-trade costs."
"Cross-platform netting is an essential prerequisite to realising the full benefits of a pan-European equities trading market. Settlement obligations for trading firms are reduced into a single net receipt or delivery per day for each UK and Irish security traded, regardless of the number of trades and the number of MTFs that firms execute trades on."
Up until now, firms trading the same UK or Irish stock on multiple MTFs had to settle the net obligation from trades on each MTF separately. By using the cross-platform netting service, EuroCCP claims firms that trade the same UK or Irish stock on two MTFs will realise 50% savings in settlement costs; if they trade the same stock on three MTFs they realise 67% savings.
EuroCCP already has five customers signed up to use the service and more are expected in the coming days. The platform is expected to deliver substantial annual savings to EuroCCP Participants, estimated at between €1.4 to €2m per year. Netting also reduces the value of settlement obligations and the associated risks.
"Delivering the benefits of cross-platform netting is another example of EuroCCP's dedication to meeting customer needs,” says Diana Chan, chief executive officer, EuroCCP. “The rapid take-up from our customers for this service illustrates the focus of trading firms on reducing settlement and other post-trade costs."
"Cross-platform netting is an essential prerequisite to realising the full benefits of a pan-European equities trading market. Settlement obligations for trading firms are reduced into a single net receipt or delivery per day for each UK and Irish security traded, regardless of the number of trades and the number of MTFs that firms execute trades on."
http://www.ftseglobalmarkets.com/news/euroccp-launches-cross-platform-netting-service.html?goback=%2Egde_2026241_member_265111929
