LCH.Clearnet to slash European equity clearing fees
LCH.Clearnet SA, the French arm of European clearing provider LCH.Clearnet, plans to cut fees for NYSE Euronext, Bourse de Luxembourg, Equiduct and NYSE Euronext’s SmartPool multilateral trading facility (MTF) by 30% from 1 July 2009. According to the firm, cash equity clearing fees in these markets have been reduced by over 75% since January 2007.
LCH.Clearnet fees are calculated by trade value and so depend on the size of the trade. The firm expects the average fee per trade to fall to €0.10 after the change. It adds that currently, around 40% of trades are cleared at a cost of €0.05.
Pricing competition in European cash equities clearing has intensified in recent months. Rival European clearing house EuroCCP, which also clears for SmartPool, cut its fees to €0.05 per side from €0.06 on 1 April. EuroCCP also clears for pan-European MTFs Turquoise and NYSE Arca Europe.
EMCF, which clears for fellow MTFs Chi-X Europe, Nasdaq OMX Europe and BATS Europe, cut is fees for UK securities to €0.03 on 14 April, but left the fees for other European equities at €0.05.
LCH.Clearnet’s latest fee cuts are part of the clearer’s focus on reducing the cost of clearing cash equities. The firm said plans are in place to drive down the firm’s cost base, enabling further fee reductions and enhanced offerings, such as a high rate of interest on collateral deposits.
LCH.Clearnet Ltd, the group’s UK arm, is the main clearing house for the London Stock Exchange.