EuroCCP set to complete client switch this month

Pan-European equities clearing house EuroCCP is on course to complete its customer migration this month, following its merger with EMCF.

By None

Pan-European equities clearing house EuroCCP is on course to complete its customer migration this month, following its merger with EMCF.

EuroCCP’s CEO, Diana Chan, told that it has completed the migration in just over three months on the first anniversary of the deal’s announcement.

“We expect to have finished migration before the end of March, with virtually all customers having joined the new combined EuroCCP entity,” Chan said. “We will decommission EuroCCP Limited once all the customers have migrated.”

The merger was first announced in March 2013 but the process of obtaining competition and regulator approval meant that the firms were not able to formally combine their operations until December last year.

EuroCCP also said the savings available to customers as a result of the merger will amount to around twice its original estimate. Prior to having access to EMCF client data, EuroCCP Limited said customers would achieve savings of around €5 million from cross-platform netting, higher volume discounts and efficiency savings as a result of there only being three interoperable central counterparties (CCPs) in Europe instead of four. However, its most recent calculations indicate customers will save around €10 million due to the merger.

As part of the deal, the new combined entity opted to be branded as EuroCCP, thought its infrastructure will be largely based on EMCF systems in Amsterdam.

“We chose to use the Dutch legal entity because it has more direct connections to CSDs and has cash accounts at several central banks, which is in the direction of regulatory expectations.  We also chose to keep EMCF’s technology as it is a standalone system, whereas EuroCCP Limited’s technology is tied to the DTCC’s and this would have resulted in our clients supporting a much larger and more complex technology infrastructure than they were using.” 

However, customer support will continue to be based out of EuroCCP’s London.

Chan said: “While our technology and operations personnel are now based in Amsterdam, we kept the client-facing parts of the business here in London, due to EuroCCP Limited’s strong reputation for customer service.”

While customers will benefit from ongoing savings on cross-netting and other benefits of combining the two CCPs, they also faced some upfront costs to their infrastructure, though Chan said this has been kept to a minimum.

“For our customers, the biggest change they had to make was in the processing of the much larger amount of data received from the combined EuroCCP,” she explained. “While most EuroCCP Limited users were already connected to EMCF systems, the combined business volume requires modifications in the customers’ IT systems to ensure continued efficiency.”

With the migration approaching completion, EuroCCP plans to turn its focus to increasing the number of fully interoperable exchanges in Europe by ensuring all those currently working with an interoperable CCP are able to offer clearing from EuroCCP, LCH.Clearnet and Six Swiss Exchange’s X-Clear.