EuroCCP has published its Annual Report for 2017 which is now available on our website. 2017 marks the conclusion of the first decade of pan-European equities trading and clearing, which are essential components of the European Union’s objective of a single financial services market. EuroCCP is very pleased with the significant role it has played to achieve this objective.
Ten years ago, the Markets in Financial Instruments Directive (MiFID) created the regulatory environment for equities to be traded on multilateral trading facilities (MTFs) in competition with national stock exchanges. By 2017, over 41% of equities trades in Europe were executed on MTFs and more than half of the trades executed on MTFs were cleared by EuroCCP. The cost of equities clearing has reduced by over 90% from pre-MiFID levels on the vast majority of platforms that have given access to EuroCCP to clear their trades.
EuroCCP has led the way to implement multiple-CCP clearing for the same trading platform, firstly among MTFs and subsequently among a number of national stock exchanges. Interoperability among CCPs allows trading firms to direct all trades in the same stock on the same day on a variety of platforms to their single CCP of choice, which has significantly reduced the all-in cost of trading. Consolidated clearing has become essential for simplicity and efficiency in post-trade.
Starting from clearing solely for MTFs ten years ago, EuroCCP has now become the most connected CCP in Europe with access to 82% of equities trades executed on 27 platforms, including nine national stock exchanges.
By the end of 2018, EuroCCP expects to bring a choice of CCP to over 95% of equities trades executed on organised markets in Europe. This will be accomplished by gaining access to a further three national stock exchanges – namely Oslo Børs, Deutsche Börse, and Borsa Italiana – subject to regulatory approval. Shortly after the completion of the Annual Report, the technical setup with Oslo Børs was completed.
Uncertainties associated with Brexit were largely dispelled by the Bank of England’s announcement of a recognition regime which will enable EuroCCP to continue serving platforms and clients in the United Kingdom (UK) post-Brexit. EuroCCP has engaged with Bank of England and, in close consultation, will apply for recognised CCP status in the UK. EuroCCP has now submitted its application and expects to complete the requirements to obtain recognised CCP status in the UK during 2018.
After over ten years as the leader of a pan-European CCP, it is now time for me to hand over the management of the company. I wish to thank clients, platforms, colleagues past and present for believing in and supporting the vision of the new paradigm in equities clearing that EuroCCP has delivered. Under new leadership, EuroCCP will continue in its second decade to become a shared post-trade infrastructure for more markets in Europe and possibly beyond.
Chief Executive Officer