MTFs & ECNs

EuroCCP and Turquoise cut trading costs for Spain

EuroCCP, the pan-European central counterparty and Turquoise, the multilateral trading facility (MTF) owned by the London Stock Exchange, have launched a new service that aim to reduce post-trade fees in Spain following recent clearing and settlement reforms.

From 3 May 2011, the EuroCCP settlement fee for Spanish securities will be reduced from the current €2.42 to €1.00 and the EuroCCP clearing fee will be reduced from €0.07 per side to €0.03 per side, up to 100,000 sides on a participant's average daily volume.

In conjunction with these changes, from 3 May Turquoise will offer a three-month pricing promotion for trading Spanish stocks on its Integrated Order Book or until daily consideration reaches €100 million. During this period the ”take' fee will be reduced to zero, while the ”maker' rebate will be unchanged at 0.2 basis points.

The reforms, known as Title V, were implemented on 18 January 2011 and allow transactions that are subject to the regulation to be settled bilaterally, without the participation of the stock exchange. Title V also removes the requirement for foreign clearing houses, such as EuroCCP, to cross positions on the local exchange with a local broker.

Prior to the change, settlement could only be completed once the incumbent domestic exchange, Bolsas Y Mercardos Españoles (BME), had generated an identification number that would be sent to the BME-owned central securities depositary, Iberclear. To get around this, aggregated trades from various MTFs were sent to local brokers for crossing on the BME at the end of the trading day.

MTFs can now get the required number directly from Iberclear. By using the new securities settlement and registration procedures authorised by Title V, the new service offered by EuroCCP with Turquoise will reduce the operational costs of trading Spanish equities on Turquoise.