EuroCCP's current clearing fees will be reduced from six euro cents to five euro cents per side, effective April 1.
The lowering of fees comes at a time when increasing competition in trading is highlighting the importance of the all-in cost advantage of trading venues that use efficient, low-cost and robust central counterparties.
The new fee structure puts EuroCCP's fees at the lowest fee level charged for clearing in Europe. It will apply to all trades submitted to EuroCCP for clearing and settlement. EuroCCP currently clears and settles trades executed on the Turquoise, NYSE Arca Europe and SmartPool trading platforms.
EuroCCP is the only central counterparty in Europe that is user-governed and that operates at cost. Its business purpose is to increase efficiency, reduce costs and reduce risks for trading platforms and firms. The EuroCCP board of directors is comprised mainly of representatives from its participant firms.
The new fee will apply to all transactions (or sides) up to an average daily number of 800,000 from all participants. Above 800,000 sides, EuroCCP fees will drop by 50%, to 2.5 euro cents per side.
"We recognise that all-inclusive, low-cost trading, clearing and settlement will help the platforms that use EuroCCP to succeed in the competition to attract more order flow, ," said Diana Chan, CEO of EuroCCP. "While EuroCCP's fees have always been among the lowest in Europe, we want to give the trading platforms and clearing firms who use EuroCCP the biggest price advantage we can. Lowering our current fees even further was an appropriate step to take in this very competitive environment. Naturally, any platform that appoints EuroCCP will benefit from our low cost and robust, battle-tested risk management."
In 2008, EuroCCP published a study of clearing costs, based on publicly available information on pricing under the voluntary Code of Conduct for clearing and settlement's requirement for price transparency. The study showed that the average clearing price per side of a transaction in Europe was 26 euro cents, or over eight times more than EuroCCP's average fees.