Source: European Central Counterparty Limited
European Central Counterparty Limited (EuroCCP) announced today that it has already hit a peak volume day of 400,000 transactions as clearing and settlement services for the Turquoise pan-European trading platform extends to 1,300 securities in 13 European national markets.
In addition, EuroCCP announced that five new customers have signed on to use its low-cost clearing and settlement platform, including Landsbanki Securities (U.K.), MF Global U.K., Numis Securities Ltd., Parel S.A., and Pershing Securities Ltd, bringing the total number of clearing participants to 20 firms.
EuroCCP began initial operations on 15 August in two markets, Germany and U.K., involving just a handful of securities. During the next five days, 11 more markets were added. The number of securities was increased rapidly over the next three weeks.
Trade volume on Turquoise is expected to reach at least 5% of the total European trading volume in the stocks by year-end, according to Eli Lederman, Chief Executive Officer of Turquoise. Lederman noted recently that Turquoise volume was running about 1% of total volume in the stocks it trades prior to entering full production.
In the period between launching across all 13 markets and securities on 29 August and 16 September, EuroCCP has cleared and settled more than 1.6 million sides and netted those transactions down by about 98% to 32,004 total settlement obligations. In addition, EuroCCP volume surpassed 400,000 transactions on 16 September, exceeding the threshold for a price reduction for the first time. This threshold was achieved only 23 days after the launch of EuroCCP's operations. Price reduction is based on volume exceeding a 400,000 daily average for a calendar month, and average volume probably will not exceed that level for September, but the 400,000 transaction milestone indicates that EuroCCP is achieving significant volume increases in its initial month of operation.
"At Turquoise, we applaud EuroCCP's efforts to bring increased efficiency and a lower aggregated cost for the combined process of trading, clearing and settling trades. Customer feedback has been laudatory that clearing and settlement activities have been going so smoothly to date in all markets," said Eli Lederman, CEO of Turquoise. "Our success to date only further underscores the confidence we had in EuroCCP's expertise and knowledge."
"We expect to continue to see strong, steady volume growth as more and more European firms look for a competitive edge in seeking less costly venues to trade, clear and settle," said Diana Chan, chief executive officer of EuroCCP. "Having successfully reached this milestone, EuroCCP will continue to focus on increasing our member base, the securities we process and the markets we can settle at so that we can provide the fullest clearing and settlement capabilities to trading platforms and to our participants."
EuroCCP has a pricing structure which is unique in the industry. The volume thresholds apply to all trading platforms and all clearing participants, regardless of their size. This means if the total volume of transactions processed by EuroCCP averages above the pricing threshold for an entire month, all clearing participants, regardless of how much they trade individually and which platform they trade on, benefit from the reduction in fees.
"We are extremely pleased with our ability to begin to deliver the commitment to market participants to lower their cost of clearing so soon after launch. We are now looking forward to the next threshold, 800,000 transactions, when the cost will be further reduced to 2.50 euro cents per transaction," said Chan. "We also want to recognise the terrific support we've received from Citi Global Transaction Services, which acts as EuroCCP's settlement agent in European markets. Their extensive network of connections with depositories throughout the continent has helped us deliver a seamless process."