Monday May 13 2013

News Source: Global Exchanges

Focus: Trading Rules

Type: General




The two largest pan-European cash equities clearing houses, EMCF and EuroCCP, plan to combine their strengths and capabilities by forming a new entity that will deliver greater efficiencies and sustainable competition to the pan-European marketplace. The combined firm will provide best practices in a number of important areas, including risk management, technology, settlement and client service.

Current owners of EMCF – ABN AMRO Clearing Bank and NASDAQ OMX – and current owner of EuroCCP – DTCC – along with BATS Chi-X Europe, have entered into a memorandum of understanding to become equal shareholders in the new combined clearinghouse. Upon execution of the definitive agreements, the transaction is expected to complete if the necessary regulatory approvals are received.

The new central counterparty (CCP) will use the risk management framework and customer-service organization of EuroCCP, and it will run on the technology and operations infrastructure of EMCF. The new entity, to be called EuroCCP, is planned to be headquartered in Amsterdam, with client-facing functions located in London and Nordic coverage provided from Stockholm.

Clients will benefit from the following:

  • Substantial settlement cost savings resulting from increased settlement netting and reduced inter-CCP settlements;
  • Reduced collateral obligations as a result of portfolio margining and a single guarantee fund;
  • Removal of one set of membership fees;
  • Improved information technology;
  • Lower connectivity expenses.

Click on the above link for more details.