LCH.Clearnet is making a series of changes to its fee structures for the clearing of Euronext.liffe financial and equity derivatives markets.
The aim of the changes is to:
- simplify fee tariffs;
- deliver a standardised approach to the charging of fees across all markets;
- make the fee structure fully transparent; and
- reduce fee levels.
The changes will be implemented in two stages, the first on 1 November 2006, and the second on 1 January 2007. The fee changes vary by trading location and product. For example, the general equity option trade clearing tariff is being standardised at around €0.05 per lot: this would, in Paris, represent a 75% fee reduction, but it is partly offset by the introduction of exercise and assignment fees which have to date not been charged in the Paris market, but have generally been charged in other locations.
The overall result is a reduction to the market of over 15% across all locations.
Fee reductions in November will benefit customers of the Amsterdam, Brussels, Lisbon and London markets. Those introduced in January will benefit customers of the Paris market, and will deliver, for the first time, full transparency on financial derivatives trades in Amsterdam with the separation of clearing and trading fees, these having been hitherto combined in a single transaction charge.
These changes reflect LCH.Clearnet's determination to deliver value and lower costs to its customers whenever and wherever possible, and represent a direct benefit of its postmerger consolidation work. They represent a step forward in the harmonisation of trade processes and transparency between the post trade infrastructure layers promoted not only by the EU Commission, but sought by the market itself as well. LCH.Clearnet and Euronext.liffe have also agreed to remove legacy cross-payments (retrocession and various guarantees) to ensure price reductions for customers can be maximised.
Roger Liddell, Group Chief Executive at LCH.Clearnet, said: "We are very pleased to announce these changes. LCH.Clearnet is committed to delivering lower fees to its custcustomers. This reduction in derivatives markets is the first - I am looking forward to announcing reductions in other markets in the near future."