EuroCCP N.V.

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EuroCCP
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Founded 2013
Headquarters Amsterdam
Key People Cecile Nagel, CEO
Products Provides clearing and settlement services
Website www.euroccp.com

EuroCCP, headquartered in Amsterdam, is Europe’s largest cash equities central counterparty for equities, exchange-traded funds and depositary receipts from 27 stock exchanges, multilateral trading facilities and other trading venues in Europe.[1]

It was formed in December 2013 from the combination of the European Multilateral Clearing Facility in the Netherlands and European Central Counterparty Limited in the UK. Its netting function for equity trades on multiple stock markets aims to reduce collateral costs substantially for participants.

It is owned by Cboe Global Markets, Nasdaq, and Euronext, each with a 20 percent stake, and ABN Amro and The Depository Trust & Clearing Corporation, which hold the other 40 percent.[2]

EuroCCP was authorized as a CCP under European Market Infrastructure Regulation on 1 April, 2014, making it the second central counterparty and the first equity clearer to be authorized under EMIR. (Nasdaq OMX Clearing was the first.) This allowed it to expand to new jurisdictions, including Germany and France.[3]

History

London-based EuroCCP Ltd. turned to a merger with EMCF in 2013 when, despite grabbing the largest market share, it continued to post losses. EMCF had also lost business. [4]

With the MiFID rules in place, multilateral trading facilities or MTFs could appoint more than one clearing house, or Central counterparty clearing (CCP). The aim there was to avoid imposing multiple collateral requirements for stock trades executed on numerous exchanges. CCPs could then net positions held on multiple markets and allow for a single settlement per stock.

Bats Europe was the first such stock exchange to enable three different CCPs to interoperate with one another. Chi-X Europe also did so, and more than 40 percent of the volume moved to EuroCCP. By 2013, Chi-X and Bats began merger talks, which also triggered the merger between EuroCCP Ltd and EMCF. By 2018, interoperability, or clearing choice, was extended 70 percent of all equities trades in Europe with clearing choice for another 25 percent by the end of 2018. Competitive clearing in equities has reduced costs by 90 percent, according EuroCCP.[5]

The clearinghouse has also talked about offering securities lending services but put those on hold when Brexit forced financial firms to deal with that.

Key People

References

  1. EMCompany Info. EuroCCP.
  2. EMCF and EuroCCP Complete Transaction to Form Largest Pan-European Equities Clearing House. DTCC.
  3. EuroCCP Gets EMIR Authorisation. MarketsMedia.
  4. Cash equities clearing house EuroCCP loses market share. The Financial Times.
  5. The Big Interview: Diana Chan. The Trade.