Dutch central counterparty (CCP) EMCF will reduce its fees by 50% for some clients from 1 October, as Europe's clearers begin to compete for business from interoperable trading venues.
The EMCF move shifts from tiered pricing to band pricing, so that participants have a single fee across all of their trading volumes regardless of the execution venue.
Under the new pricing bands, EMCF will charge €0.03 for less than 100,000 executions cleared per counterparty; €0.02 up to 200,000; €0.01 up to 500,000 and €0.005 for more than 500,000 executions cleared. For example, a client trading 75,000 trades daily on average during a month would pay €0.03 per trade, so the cost of clearing would be €2,250 per day.
The clearer has stated that the new reduced fee schedule is preparation for the four-way interoperability between European CCPs that is due to be implemented by 1 January 2012.
EMCF currently provides clearing services for multilateral trading facilities (MTFs) BATS Europe, Burgundy, Chi-X Europe, Quote MTF, TOM, Nasdaq OMX Nordic as well as Nasdaq OMX First North.
Interoperability allows brokers to decide where their trades are cleared, breaking the link between execution venue and choice of clearer and introducing competition between Europe's clearing houses.
Chi-X Europe announced post-trade interoperability earlier this month, with a choice of four clearers including EMCF, which had previously declined to join similar initiatives, EuroCCP, LCH.Clearnet and SIX x-clear. BATS Europe introduced its own interoperating service in July, including the same clearers minus EMCF.
UBS MTF, the dark pool operated by Swiss broker UBS, has also stated that it has reached an agreement with EMCF and LCH.Clearnet to offer four-way interoperability. UBS MTF already offers clearing choice via EuroCCP and SIX x-clear and has said it will add EMCF and LCH.Clearnet “as soon as they are ready” and subject to regulatory approval.
In July, SIX x-clear, the clearing arm of SIX Securities Services, introduced its own new fee structure for interoperable trading venues, designed to encourage new and existing clients to consolidate their clearing volumes with SIX x-clear across multiple exchange and MTFs. EuroCCP also lowered its fees on 29 July, to coincide with the launch of BATS Europe's new clearing model.
Under the SIX x-clear pricing model, clearing will be charged at €0.0085 per clearing transaction if the total current volume of a client exceeds 1.5 million clearing transactions per month. In all other cases €0.021 per clearing transaction will be charged.
By comparison, EuroCCP's new tariff is €0.03 cents per side for the first 100,000 sides, then €0.01 cent per side for further sides up to 230,000, above which there is no further charge.