European Central Counterparty (EuroCCP ) has launched a new service offering central counterparty clearing of trades in US stocks and US exchange-traded funds (ETFs) to European trading firms.
EuroCCP’s new service gives European trading firms an opportunity to trade US securities on a variety of pan-European platforms during European trading hours and to settle those trades in DTC. By offering a service where US securities settle directly at the US CSD, EuroCCP provides European trading firms with cost-effective post-trade solution.
Its clearing service for US issues allows EuroCCP to extend the efficiency, cost-saving and counterparty risk protection benefits it already provides to clients’ European-listed securities transactions to US stock and US ETF transactions.
Initially, the US securities eligible for clearing through EuroCCP include approximately 100 stock issues and 50 ETFs. EuroCCP expects over time to expand the scope of eligible instruments to further equities, ETFs, and to ADRs.
EuroCCP’s clearing service for eligible US issues is open to any trading venue cleared by EuroCCP that offers trading in the securities. Trading will be against US dollars. The new service increases the number of markets cleared by EuroCCP to 19.
Andrew Simpson, head of product management in London at EuroCCP, said: “With our new service, we expect to encourage the development of liquidity in US equities in Europe. European trading firms will have a centralised clearing solution to facilitate their trading of US securities on multiple European trading venues.
“We are leading the way by providing European investors with the most comprehensive array of central counterparty services on a single post-trade platform – and at the same time offer a lower-cost settlement alternative than previously available to firms trading in Europe. We’re focused on delivering services that reflect the demands of firms, making it easier to build trading strategies across multiple asset classes – US and European equities issues, GDRs and Exchange-Traded Funds – and driving down the cost of post-trade.”