UK-based clearing house EuroCCP has launched a service to give customers the benefits of cross-platform netting on UK and Irish stocks executed on multilateral trading facilities (MTFs).
The service will enable trades made in the same security on the same day to be netted into a single settlement obligation for all of the MTFs that EuroCCP clears.
Users should benefit from significant cost savings, as up until now firms trading the same Irish or UK stock on multiple MTFs would need to settle the net obligation from trades separately for each venue.
By introducing cross-platform netting, EuroCCP’s customers will generate a saving of 50% if trading a stock on two MTFs, with increased savings the more MTFs they are trading on. EuroCCP said the service will deliver annual savings of between €1.4 million to €2 million.
"Cross-platform netting is an essential prerequisite to realising the full benefits of a pan-European equities trading market,” said Diana Chan, CEO of EuroCCP. Settlement obligations for trading firms are reduced into a single net receipt or delivery per day for each UK and Irish security traded, regardless of the number of trades and the number of MTFs that firms execute trades on."
EuroCCP said it had already signed up five customers for the service and expects more in the coming days.
Cross-platform netting is available across BATS Chi-X Europe, Burgundy, Equiduct, GETMatched Europe, NYSE Arca Europe, SIGMA X MTF, SmartPool, Turquoise and UBS MTF.