Deutsche Börse to extend central counterparty service to foreign shares

Deutsche Börse to extend central counterparty service to foreign shares

Deutsche Börse is extending its central counterparty service (CCP) for equities trading to cover foreign stocks and ETFs as of May. The move will cut clearing and settlement fees for foreign securities to the same price as German stocks.

The exchange says version 2.0 of its CCP service will include support for foreign shares in collective custody from Austria, Belgium, Finland, France, Ireland, Italy, Luxembourg and Switzerland.

All exchange traded funds currently listed in the XTF segment will also be included in the CCP service. The number of securities will be increased in subsequent phases.

Xetra OTC transactions - transactions concluded off-exchange that can be directly entered into the clearing and settlement process using the electronic trading system - will also be included in the CCP as of May. Deutsche Börse says
this will provide increased efficiency, including a reduction in counterparty risk and the ability to net OTC positions with exchange transactions.

Commenting on the move, Rudolf Ferscha, responsible for trading and clearing services at Deutsche Börse, says: "Traders will benefit from lower fees and a uniform price structure for all securities included in the CCP."

The CCP service was introduced in March 2003 and currently covers equities trading on Xetra and the floor of the Frankfurt Stock Exchange.

Deutsche Börse says the market efficiency and quality of the securities included in the CCP have increased further since its introduction. The liquidity of these stocks on Xetra has increased on average by more than 50%. For participants, this has meant a reduction in implicit trading costs of more than EUR500 million to date.

Comments: (0)