Under the agreement, ownership of the new venture will be split evenly between four players: the DTCC, which owns EuroCPP; current EMCF owners ABN Amro Clearing Bank and Nasdaq OMX; and new partner Bats Chi-X Europe.

Called EuroCCP and headquartered in Amsterdam, the new entity will be led by current EuroCCP CEO Diana Chan, with EMCF chief Jan Booij acting as COO, subject to regulatory approval.

The partners say that the new clearing house will use the risk management framework and customer-service organisation of EuroCCP but run on the technology and operations infrastructure of EMCF.

The deal means that clients will benefit from substantial settlement cost savings, reduced collateral obligations, removal of one set of membership fees, improved IT, and lower connectivity expenses, claim the firms.

Says Booij: "This is not only a transformational initiative for EMCF and EuroCCP but for the industry. It will enable us to provide more flexible and innovative clearing services to all clients, while our sustainable business model will ensure costs are kept low and will provide the very best in risk management, technology, settlement and client service."

Chan adds: "The new CCP will lead the way in encouraging greater competition between all cash equity clearing houses while driving down costs. Following the launch of four-way interoperability, the industry must now consolidate in Europe to achieve economies of scale and respond to the changing needs of market participants."