LCH.Clearnet SA and Euronext are pleased to announce a series of reductions in clearing fees.
These reductions, which reflect LCH.Clearnet's and Euronext's determination to deliver value at competitive pricing levels, will come into effect on 1 January 2007.
From 1 January 2007 there will be an overall average of 15% reduction in clearing fees (including, as in the past, fees collected on behalf of Euronext - the "retrocession") on trades executed on Euronext cash markets.
In addition, a further market volume discount will be applied to the clearing component only of the fee; an extra 20% clearing fee discount will be applied on volume exceeding 740,000 postings a day (equivalent to 370,000 trades a day) across members. This could amount to a maximum discount of 26% on the combined fee components.
The impact of these changes will represent, on average, a total decrease of 3% for market participants trading on the Euronext Amsterdam and Lisbon segments, a decrease of 6% for those trading on Euronext Brussels and a decrease of 19% for those trading on Euronext Paris.
This joint fee reduction, involving both LCH.Clearnet and Euronext, is an additional step following that already implemented in January 2006 for stocks listed on the Euronext Paris market. In order to improve transparency on the fees collected by LCH.Clearnet and Euronext, the current combined Clearing fee will, from 1 January 2007, be unbundled into two separately identifiable fees: a Clearing fee and an Exchange fee.
The reductions announced today follow those announced by LCH.Clearnet Limited last week, and again reflect the outstanding growth in cleared volumes. As in London, they represent the first stage in an ongoing programme of tariff reduction by the LCH.Clearnet Group for clearing cash equities. Marginal costs are relatively low for central counterparties, and, as a consequence, the Group is undertaking a comprehensive review of its tariffs generally, with a view to introducing a pricing structure which will better reflect the structure of its cost base, including a greater concentration on discounting fees at high levels of activity.
Both LCH.Clearnet and Euronext are committed to continuing to improve transparency and to harmonising their fees for all the Euronext markets in a next step.
Commenting on the reductions, Roger Liddell, LCH.Clearnet Group Chief Executive, said: "This second set of equity clearing fee reductions completes the first phase of the Group's plans to deliver lower clearing tariffs for clearing equities across our range of cash market customers. As I have said elsewhere, we are determined to set tariffs at reasonable and competitive levels, whilst ensuring that we can continue to deliver high quality clearing services across all our market segments. I now look forward to the outcome of our fully comprehensive Group review, which we will be announcing at the end of the year."
Jean-François Théodore, Chairman of the Managing Board and CEO of Euronext, commented: "We are pleased to prove once more the efficiency of our horizontal business model which is able to deliver transparency and significant value to our customers, therefore increasing our competitive edge."