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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.

Industry stakeholders partner on blockchain based margin and collateral solution

AMSTERDAM, BRUSSELS, LONDON and STOCKHOLM, 19 June 2018 – ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have completed a joint proof of concept to make the use of securities more efficient when used to cover margin calls, including after business hours, using blockchain, or distributed ledger technology (DLT).

This solution addresses significant business challenges and inefficiencies related to the current provision of collateral to Central Counterparties (CCPs) and has demonstrated that a shared, resilient network can be built between collateral givers, collateral takers and intermediaries.

The inefficiencies of collateral processing  have been heightened as a result of recent market changes such as extended trading hours by stock exchanges and the requirement to centrally clear derivatives traded bilaterally (OTC) under the European Market Infrastructure Regulation (EMIR). Today, a CCP margin call typically needs to be covered by euro collateral within a short time frame. After the regular hours of central banks and central securities depositories, usually ending at 18:00 CET, options are limited. Several CCPs currently allow for the use of securities to cover intraday (evening) initial margin calls, but this method is rarely used due to inefficient and complex securities delivery processes.

As an increasing number of buy-side market participants centrally clear their derivatives trades, the need to provide an efficient securities collateral solution has become essential. Using the solution developed in the proof of concept, parties were able to handle the margin call, the securities collateral delivery and the return process within minutes. Clearing participants and CCPs were able to optimise their collateral positions through a collateral dashboard.

The underlying collateral transfers were processed by Euroclear’s Central Securities Depository, ensuring settlement finality and regulatory compliance.

Nasdaq developed the proof of concept for the DLT nodes while ABN AMRO Clearing, EuroCCP and Nasdaq Clearing developed a specific front-end and managed integration into their own environments.

Coen van Walbeek, Global Head of Treasury and SBL  at ABN AMRO Clearing said: “With a faster and more globalised market, it is essential to make the processing of collateral more efficient. Expanding the possibilities to use securities as collateral will make clearing through CCPs more attractive and cheaper for buy-side market participants. This is a breakthrough for the CCP model.”

Diana Chan, CEO at EuroCCP said: “We are excited to be partnering on a proof of concept  that is extremely useful for transactions that are not already well-served by market infrastructures. With a solution like this in place we will be able to efficiently provide counterparty risk protection of equity trades after hours while reducing operational complexities. Today we are limited by European banking hours or arrangements in other time zones.”

Walter Verbeke, Global Head of Business Model and Innovation at Euroclear added: “As a major collateral house, holding € 28.5 trillion worth of assets, we are pleased to participate in this initiative. It demonstrates that a smart combination of NewTech and the resilience of the Central Securities Depository can work effectively and in full compliance with regulatory requirements.”

“As both a leading market technology provider and a CCP operator, Nasdaq is uniquely positioned to bring efficiencies to collateral management. We believe that blockchain technology brings with it a huge potential to transform markets everywhere, and this project is an excellent showcase of this.” said Julia Haglind, CEO of Nasdaq Clearing.

About ABN AMRO Clearing

ABN AMRO Clearing is one of the world’s leading providers of clearing and financing services for listed derivatives and cash securities, OTC products, warrants, commodities and FX. With 11 offices globally employing more than 800 staff, ABN AMRO Clearing services clients on 160+ exchanges, MTFs and FX liquidity centres and consistently ranks as a top 3 clearer in most time zones.   We consistently post over 20% market share of transactions cleared on most relevant derivatives exchanges globally. ABN AMRO Clearing offers an integrated approach to global transaction processing, financial logistics and risk management and processes over 16 million trades per day.

ABN AMRO Clearing received the FOW Award as the ‘Proprietary Traders’ Clearing Firm of the Year’ (Dec 2013, 2014, 2015, 2016,2017); the CTA Intelligence Award for FCM – Best Client Service (US, Jan 2015 and 2016; Europe, Nov 2016), FCM – Innovation (US, Jan 2017;  Europe, Nov 2017) and Best FCM – Overall (Europe, Nov 2015).  We also received the HFM-Week Service Award for Best Prime Broker – Client Service (Europe, Apr 2016). For more information: www.abnamroclearing.com

About EuroCCP

EuroCCP clears equities traded on stock exchanges, multilateral trading facilities and other trade sources. After a trade has been executed, EuroCCP centrally manages counterparty risk for trading firms and reduces their post-trade costs through netting. EuroCCP is the most connected CCP in Europe, with access to 82% of equity trades executed on 26 trading platforms. EuroCCP clears equities, ETFs and depositary receipts listed in 19 national markets including the United States.

EuroCCP is headquartered in Amsterdam, equally owned by the stock exchanges Cboe Europe, Euronext and Nasdaq, by ABN AMRO Clearing Bank and by The Depository Trust & Clearing Corporation (DTCC).

About Euroclear

Euroclear group is the financial industry’s trusted provider of post trade services. At the core, the group provides settlement, safe-keeping and servicing of domestic and cross-border securities for bonds, equities and derivatives to investment funds. Euroclear is a proven, resilient capital market infrastructure committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise.

The Euroclear group includes Euroclear Bank – which is rated AA+ by Fitch Ratings and AA by Standard & Poor’s – as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 733 trillion in securities transactions in 2017, representing 215 million domestic and cross-border transactions and held EUR 28.6 trillion in assets for clients.

About Nasdaq

Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today’s global capital markets. As the creator of the world’s first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world’s securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion.

To learn more, visit: http://business.nasdaq.com

For further information please contact

ABN AMRO Clearing:  Brigitte Seegers +31 20 6283365, brigitte.seegers@nl.abnamro.com

EuroCCP: Jeff Watt, Greentarget, +44 207 324 5482, jeff.watt@greentarget.co.uk

Euroclear: Inge Drijkoningen, +32 2 326 4431, inge.drijkoningen@euroclear.com

Nasdaq: David Augustsson, +46 734496135, david.augustsson@nasdaq.com

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.

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EuroCCP FIF Specifications

Version 01.12 June 2018

Annual Client Review 2018

EuroCCP is shortly to undertake its annual Clearing Participant review which will require all Clearing Participants to provide the following information:

  1. Certificate of Incorporation and current Articles of Association,
    Excerpt from Chamber of Commerce or Company Register and
    Organisation chart
  2. Current Authorised Signatory list
  3. Proof of regulated status: Credit institution, Bank or Investment firm established in a FATF country (If a bank, evidence of banking license)
  4. Copy of your Annual Report (English Version) and Disclosure Report
  5. Current contact list for all teams within your organisation, including escalation contacts
  6. LEI Number

EuroCCP is a central counterparty authorised pursuant to the EU Regulation on OTC derivatives, central counterparties and trade repositories (Regulation 648/2012 “EMIR”) and is required to conduct a comprehensive review of its Clearing Participants.

The deadline for completion of this review is 31 May 2018 and EuroCCP’s Client Services Team will be contacting all Clearing Participants by email from 17 May 2018.