T2S Migration Denmark – Kronos2 Go-live

In preparation of the introduction of Danish Kroner as settlement currency in the TARGET2-Securities platform (T2S), Danmarks Nationalbank will implement the second release of the Kronos system (Kronos2) between Friday 17 August 2018 afternoon 16.30 CET and Saturday 18 August 2018 12:00 CET.

With the migration to Kronos2, Danmarks Nationalbank will introduce T2S functionality to its RTGS system which will be available from Monday 20 August 2018. As direct participant with the Danish Central Bank, EuroCCP will participate in this migration and upgrade its current link to Kronos2.

As the payment details and deadlines for Danish Kroner remain unchanged, there will be no impact to EuroCCP’s settlement services for the Danish market and no further actions are required from Clearing Participants or their settlement agents.

VP Securities, the Danish CSD, will perform a temporary adjustment to the settlement batches for settlement date 20 August 2018. Batches 10 and 20 would have been executed during the period after Kronos has been shut down but before the migration to Kronos2 has been completed. These batches will therefore be executed in the CSD without settlement.  All settlement will be transferred to the remaining DKK settlement batches 30 at 07:00 CET, 40 at 09:45 CET and 60 at 11:45 CET settling on Monday 20 August 2018. Batch 14, used for the exercise of rights, will be executed without subscription on Friday 17 August 2018.

EuroCCP Appoints Cécile Nagel as CEO

EuroCCP, Europe’s leading equities clearinghouse, today announces the appointment of Cécile Nagel as Chief Executive Officer.  Ms Nagel joins from the London Stock Exchange Group (LSEG) where she was most recently Head of LSE Markets Global Product Development and LSE Exchange Traded Products.

Ms Nagel joined LSEG in 2009 and has worked in a number of senior roles across the organisation including Head of Strategic Planning for the Group and Global Head of Equities and Commodities at LCH Group, LSEG’s multi-asset clearinghouse.  Prior to LSEG, she worked at Oliver Wyman and the Financial Services Authority.

In November 2017, EuroCCP confirmed that Diana Chan, Ms Nagel’s predecessor, would hand over the management of the firm in the following year.

Jan Bart de Boer, chairman of EuroCCP’s supervisory board said: “We are delighted to have Cécile join as EuroCCP’s CEO.  She is one of Europe’s leading market structure experts and is ideally placed to lead the business at a time when the equities market is expected to continue to transform as a result of regulatory change and the application of new technology.”

She joins a firm, created only 10 years ago, that has become one of the pre-eminent  pan-European equities CCPs, with access to 26 venues including CBOE Europe, Euronext, the London Stock Exchange, Nasdaq and SIX Swiss Exchange.”

Cécile Nagel said: “I am honoured to have been asked to lead EuroCCP.  It is a major market infrastructure in Europe with a strong equities footprint and significant opportunities for growth.  I look forward to working with my new colleagues to deliver the next stage of its development for the benefits of clearing members, trading venues and all stakeholders.”

Ms Nagel will start her role in September 2018.

EuroCCP signs with Deutsche Börse

Deutsche Börse AG and European Central Counterparty NV (EuroCCP) have signed an agreement, which will govern the project for EuroCCP to gain access to the Frankfurter Wertpapierbörse (FWB), the Frankfurt Stock Exchange.

This solution provides self-clearing exchange members and clearing agents with a choice of CCP for cash equities traded on FWB.  FWB will introduce EuroCCP as an additional CCP for cash equity and ETF trades executed on XETRA©, on a preferred CCP basis.  It is anticipated that the go-live date will be in Q1 2019, subject to regulatory approval.  Further details regarding client testing and go-live date will be provided in due course.

With the introduction of competition in the market, clearing services will become more efficient due to a reduction in clearing fees, cross-venue netting opportunities and the optimisation of operational processes.

Since its inception, EuroCCP has been an advocate of open access for the benefit of clearing and trading participants alike. Albert-Jan Huizing, CTO at EuroCCP said: “We have led the way in introducing multi-CCP clearing on the same trading platform. Arrangements based on interoperability or preferred-CCP-model have significantly reduced the all-in cost of trading and have been an essential driver of post-trade simplicity and efficiency”.

In addition, further requests for trade feed access have been submitted to other exchanges.  Currently, Oslo Børs is under implementation with a go-live date anticipated during Q3 2018, and Borsa Italiana and Euronext Dublin will follow during Q4 2018.  Once these arrangements are in place, it is expected that there will be a choice of CCP for 95% of cash equity trades in Europe.

EuroCCP to clear Euronext Dublin trades

We are pleased to announce that EuroCCP has been appointed as the sole CCP for Euronext Dublin as from November 2018.

Euronext undertook a detailed post trade analysis in order to determine the optimal post trade model for its clients. Given EuroCCP’s existing pan-European footprint, its access to 19 European markets, 26 trading venues and successful decade long presence in the cash equities clearing market, Euronext chose to appoint EuroCCP as the sole CCP for Euronext Dublin. EuroCCP’s clients will be able to cross-platform net all Irish trades executed on any of the platforms currently serviced by EuroCCP.

The Euronext Dublin segment is scheduled to be migrated to Euronext’s central order book in November 2018, with EuroCCP providing clearing services from that date. Further details can be found on EuroCCP’s website. We also refer you to Euronext’s communication, which can be found here.

EuroCCP and Euronext will be jointly working on further detailed documentation, including migration planning, which will be provided in due course.

Euronext reports the CCP identifier in executions in real time

EuroCCP is pleased to advise Clearing Participants and their Trading Participants that Euronext will make the CCP Identifier available in its real-time trade report execution messages.

Euronext’s system update will enable the CCP Identifier to become available in the original execution message, thus immediately informing clients of the CCP which is to clear the trade under the “User Choice” model.

Euronext plans to implement the CCP Identifier in its UAT environment in September 2018, which should be included in the production environment in October 2018.

Further details can be found on Euronext’s website at Euronext Info-Flash and the implementation dates in UAT and production will be confirmed in due course.

EuroCCP supporting new EU based venues

In advance of the UK’s proposed exit from the European Union (EU), EuroCCP is working closely with trading venues that are establishing new EU-based venues to continue to serve their trading members and trading activity across Europe.

EuroCCP already offers post-trade clearing services to UK based venues and clients and will now assist the venues with extending their service offering through their EU-based entities.  We would refer you to the recent announcements made by Cboe Global Markets and Turquoise dated 3 July 2018 in this regard.

As a consequence of these developments, EuroCCP will offer post-trade clearing services to the newly established European trading venues in its capacity as a Pan-European Central Counterparty in addition to the current activity for existing UK based venues and clients. EuroCCP is best positioned to support clients establishing new memberships through their EU based entities to continue trading and clearing in the EU post Brexit.

To continue to offer its services to clients and platforms incorporated in the UK following Brexit, EuroCCP has submitted its application for recognition as a CCP with the Bank of England.

Further details and next steps on all new initiatives will be published in due course.

T2S Migration Denmark – Danish Kroner

Following EuroCCP’s newsflash dated 28 March 2018 regarding the migration of Danish Kroner  denominated settlement activity to T2S, the TARGET2 Securities platform, EuroCCP wishes to remind Clearing Participants of the forthcoming changes to  EuroCCP’s Standard Settlement Instructions (SSIs), Client testing requirements and the EuroCCP T2S migration plan.

Standard Settlement Instructions Danish market

With the migration of Danish Kroner denominated securities, settlement arrangements and SSIs for Clearing Participants and EuroCCP’s will change. EuroCCP will contact those Clearing Participants that are active on Danish market to obtain new SSIs for the production environment via the EuroCCP Denmark Information Form, which should be completed and signed and returned to EuroCCP as soon as possible.

The new EuroCCP SSIs, detailed below, will apply from settlement date Monday 29 October 2018 following the successful migration weekend:-

EuroCCP SSIs VP Securities:

Delivery / Receiving party BIC (DEAG / REAG) EMCFNL2AXXX
Securities Account VPDK17501175001
CSD of Delivering / Receiving party (PSET) VPDKDKKKXXX

All settlement instructions in which EuroCCP is a counterparty will settle on the T2S platform, Clearing Participants must have undertaken the necessary actions to ensure that the correct account structure is arranged with VP Securities which allows them to settle the CCP related activity within a T2S securities account.

Client testing T2S mode for Danish market

EuroCCP’s client test environment is currently in T2S mode for the Danish market and available for client testing. Clearing Participants and their settlement agents are advised to undertake testing in accordance with VP Securities’ T2S requirements.

In order to support testing, Clearing Participants must provide their SSIs to EuroCCP before testing starts in T2S mode.

Clearing Participants using the settlement agent PoA process, should instruct their settlement agent to process the SWIFT MT54X messages received.

EuroCCP’s T2S Migration plan – Danish Kroner

Between Friday 26 and Sunday 28 October 2018, Danish Kroner denominated static data, securities positions and pending settlement instructions will be migrated from VP Securities’ legacy settlement system to T2S.

EuroCCP has published its T2S migration plan for Danish Kroner denominated activities on its website, which outlines migration of pending instructions, corporate action handling, EuroCCP reporting and client readiness, and can be found at EuroCCP T2S migration plan – Danish Kroner.

Further details on the changes to certain elements of EuroCCP’s services for the Danish market, can be found on EuroCCP’s website at Service Description Denmark T2S – Danish Kronor

Progress with Borsa Italiana trade feed access

Following the official request in November 2017 in accordance with the provisions of MiFIR article 36, EuroCCP is pleased to announce that Borsa Italiana has permitted EuroCCP access to the Borsa Italiana trade feed. The target go-live date for clearing Borsa Italiana trades will be late Q3 – early Q4 2018.

The project implementation phase has begun for access to the Borsa Italiana markets listed below and EuroCCP will initially offer clearing services on the following markets, segments and financial instruments:

  • Shares, Depositary Receipts and subscription/pre-emptive rights traded on MTA – Mercato Telematico Azionario (MIC Code MTAA)
  • Shares and Depositary Receipts traded on the BIt Eq MTF – segment BIt Global Equity Market (BIt GEM) (MIC Code MTAH)
  • ETFs traded on the ETF+ market (MIC code ETFP)

Borsa Italiana presented the details at its Technical User Group in Milan on 25 June which, together with communication of the CCP identifier, are available on the Borsa Italiana website.

Further details regarding client testing and the actual go-live date will be provided in due course.

Background information

Borsa Italiana will introduce EuroCCP as an additional CCP for its cash equity and ETF markets, on a Preferred CCP basis, which enables a trading participant to designate EuroCCP as its Preferred CCP. Should both parties to a trade designate EuroCCP as the Preferred CCP, the trade will be cleared by EuroCCP – otherwise, the trade will be cleared by the incumbent CCP. The Preferred CCP model does not require the incumbent CCP to interoperate with EuroCCP.

Since its inception, EuroCCP has been an advocate of open access for the benefit of clearing and trading participants alike.  In addition, further requests for trade feed access have been submitted to other exchanges.

With the introduction of competition in these markets, clearing services will become more efficient whilst reducing post trade costs, as evidenced in those markets which already offer competitive clearing arrangements.

Annual Report 2017 is now available

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.

Diana Chan
Chief Executive Officer

Updated Regulation Fees and Penalties

EuroCCP is pleased to announce a change to its Regulation Fees and Penalties that will come into effect on 1 July 2018.

The updated Regulation reflects the following changes:-

  • A supplementary clearing fee of EUR 0,015 (EUR 1,5 cents) for Oslo Børs trades cleared by EuroCCP,
  • A platform access connectivity fee of EUR 0,001 (Eur 0,1 cents) for all trades cleared by EuroCCP.  This fee will cover a proportion of the costs incurred to access new platforms,
  • Due to the successful migration of the German and Austrian markets to T2S and the subsequent processing efficiencies, EuroCCP will reduce the settlement fee in Austria from EUR 3.45 to EUR 1.50 and from EUR 1.65 to EUR 1.50 in Germany,
  • A reduction in the buy-in administration fee from EUR 150 to EUR 50, which is charged one day prior to the buy-in execution date, and
  • The buy-in execution / cash settlement fee of EUR 150 when the buy-in or cash settlement is actually triggered.

 The updated FIF specification document can be found here.

EuroCCP FIF Specifications

Version 01.12 June 2018