Turquoise, a pan-European multilateral trading facility (MTF), will start trading depository receipts from October, allowing its members to trade emerging markets securities from its platform.
From 2 October, Turquoise members will be able to trade the ten most liquid depository receipts (DRs), before a full rollout of 120 of the most heavily-traded DRs on 16 October. Clearing will be provided by EuroCCP, the MTF’s incumbent central counterparty.
Each DR comprises a specific number of underlying ordinary shares in an overseas company, normally based in an emerging market. They allow investors to trade international markets without incurring cross-border custody charges that can result from holding and trading non-European shares.
According to research from banking group Citi, global DR trading in 2008 reached a record $4.2 trillion, up 27% from 2007. London-traded DRs accounted for $522 billion of this total.
“Members will be able to execute, clear and settle their transactions on the Turquoise MTF as they would with any other European equity, utilising our competitive pricing schedule, robust technology and fully risk-managed clearing solutions,” said Eli Lederman, Turquoise CEO.
Turquoise recently put itself up for sale, appointing UBS, one of its nine founding members, to find a buyer.