Pan-European central counterparty EuroCCP will start offering clearing services for exchange-traded currencies (ETCs) from 5 February, with multilateral trading facility Turquoise the first to take advantage.
Exchange-traded currencies are listed securities that give investors the chance to track the performance of underlying currency indices. EuroCCP will initial offer clearing in 18 ETCs that will provide long or short passive exposure to the currencies of G-10 countries against the US dollar. The ETCs will be listed in both US dollar and sterling, and settled via UK central securities depository CREST.
MTFs Chi-X Europe and BATS Europe, as well as the London Stock Exchange, also offer ETC trading.
“By providing a safe post-trade environment, we believe this service offering will encourage liquidity,” said Andrew Simpson, head of EuroCCP product management in London, in a statement. “Our ETCs clearing service responds to investor demand for liquid, secure and transparent exchange-traded securities and also reflects increased investor appetite for foreign exchange instruments.”
“Currency ETCs are presenting the European market with new trading opportunities,” added Adrian Farnham, chief operating officer of Turquoise. “Turquoise is delighted to provide highly efficient access to such an expanding market, along with the competitive pricing schedule and robust technology that the Turquoise MTF already offers for equities and depositary receipts.”