A study published by EuroCCP, the clearing counterparty for new European multilateral trading facility Turquoise, claims that it offers the lowest costs for clearing in Europe, based on tariffs disclosed by all service providers.
A comparative analysis conducted by EuroCCP, a subsidiary of the Depository Trust & Clearing Corporation, over the past month reported the average clearing cost for European equities securities at 26 eurocents per transaction. The cost of clearing is highest in Germany at 55 eurocents per transaction. The study reported a 17 eurocent per transaction cost in London, compared with 23 eurocents on Euronext exchanges.
In contrast, EuroCCP’s anticipated average cost will be 2.9 eurocents per transaction.
The study was conducted over the past month, looking at pricing data made available by various central counterparties throughout Europe under the terms of the voluntary European Code of Conduct.
“Financial firms who use EuroCCP will gain advantage from our ‘at cost’ business model that returns excess revenue to our customers and that continually drives down fees,” said Diana Chan, CEO of EuroCCP, in a statement. “EuroCCP clears for multiple trading venues so financial firms can not only net down the number of settlement obligations but also reduce the amount of collateral needed."
Chan predicted further fee reductions as a result of MiFID and the Code of Conduct, “Since the European authorities announced their intention to allow new entrants for trading and clearing securities, established markets and central counterparties have slashed their fee structures—and more can be expected.”
EuroCCP has already been chosen by Turquoise and SmartPool, two new multilateral trading facilities due to launch before the end of the year.