EMCF, the pan-European clearing house, claims to have introduced the lowest clearing tariff in the world, further demonstrating the benefits of interoperability for market participants.
From 1 March, clients of the central counterparty (CCP) that clear more than two million trades a day will pay €0.001 per trade for all their equities business, which the clearer says equates to a lower rate for clearing and netting than anywhere else in the world.
EMCF has also said it will decrease settlement fees for Dutch, French, Swiss, UK and Irish markets, introduce participant loyalty schemes to create incentives for participants to commit to the CCP and simplify its tariff structure to remove the separate treatment for trades matched internally. From the start of next year, EMCF will also remove its order level tariff.
The clearer said it was able to cut settlement costs after renegotiating tariffs with agents in Dutch, French, Swiss, UK and Irish markets. It added that it planned to further reduce fees in the UK and Ireland by establishing direct membership with central securities depository Euroclear UK and Ireland in the near future.
“Not only do these changes reaffirm our position as the lowest cost provider in Europe, but our customers now have access to the lowest rates in the world,” said EMCF CEO Jan Booij. “As a new central counterparty with no legacy to support, only EMCF can continue to deliver such value, while maintaining the safety of the markets it serves.”
Competition among CCPs is heating up due to the introduction of interoperability schemes that allow brokers to cut post-trade costs by consolidated clearing flow with one provider.
Last month, multilateral trading facility (MTF) BATS Chi-X Europe introduced four-way interoperability that allows members to direct clearing flows to EMCF, Anglo-French CCP LCH.Clearnet, SIX x-clear and EuroCCP, the European arm of US clearer DTCC. Turquoise, the MTF owned by the London Stock Exchange launched the first phase of its interoperability scheme last November.
Burgundy and Nasdaq OMX Nordic are set to offer clearing choice later this year, which will make upwards of 60% of European trading flow subject to interoperability arrangements.
The London Stock Exchange and SIX Swiss Exchange, which both offer interoperability between LCH.Clearnet and SIX x-clear, are also reportedly looking at ways to further extend their post-trade offerings.