EUROPEAN UNION: Sale and Purchase Agreement Signed to Combine EMCF and EUROCCP

Thursday July 18 2013

EMCF and EuroCCP on 17 July 2013 announced that the sale and purchase agreement has been signed to form a new pan-European cash equities clearing house that builds on the strengths of both firms. This follows the announcement made in March that the firms planned to combine.

The owners of EMCF – ABN AMRO Clearing Bank and NASDAQ OMX – and owner of EuroCCP – DTCC – along with BATS Chi-X Europe, are signatories to the agreement.

Subject to approval from regulators and competition authorities, the new CCP, to be named EuroCCP N.V., will bring together the strengths and capabilities of each firm to deliver greater efficiencies and sustainable competition to the pan-European market place. The new CCP will use the risk management framework and customer-service organisation of EuroCCP, and it will run on the technology and operations infrastructure of EMCF.

EuroCCP N.V. will be headquartered in Amsterdam, with customer-facing functions located in London and Stockholm.
Combining the strengths of EMCF and EuroCCP will deliver a number of benefits to customers including:

• Sustainable competition in European cash equity clearing;
• 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;
• Superior customer service, risk management, IT and operations as a result of the combination.
• The transaction is expected to complete once the necessary regulatory and competition authority approvals are received.

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