EuroCCP has access to around 95% of Europe’s equities trading activity executed on recognised exchanges, however only 68% of this is interoperable. 17% adopts a clearing process called “User Choice”, or otherwise known as a “Preferred Clearing”.
EuroCCP is the leading CCP in Europe and champions open access through Preferred Clearing, introducing competitive clearing to regulated markets where interoperabiltity is not currently available.
In the absence of interoperability, the “User Choice Model” can be adopted. Also known as “Preferred Clearing”, a trade is cleared by the “Preferred CCP”, when both sides of the trade select the “Preferred CCP”
How Does Preferred Clearing Work?
For EuroCCP to clear a trade on one of these venues, the buyer and seller of the trade need to select EuroCCP as a preferred CCP at the point of onboarding.
The greater number of participants, the greater the chance of a trade being cleared by the “Preferred CCP”
In order to maintain transaction reporting, trade booking and reconcilation, the venues will report back to each trading participant which CCP has cleared the trade.
- Includes all equities & ETFs traded on Euronext Paris, Brussels, Lisbon (Main, Access, Growth) and Amsterdam (Main).
- Clients of Euronext will receive the CCP identifer in the SBE message FILL messages.
- All equities & ETFs traded on Mercato Telematico Azzionare (MTA), Borsa Italiana Equity MTF and ETFPlus market.
- Clients of Borsa Italiana will receive the CCP identifer in the MT202, MT204, MT205, MT203 messages.
- All equities & ETFs on Frankfurter Wertpapierborse (FWB).
- Clients of Deutsche Borse will receive CCP identifier in the ETI Trade Notification or FIX Trade Capture Report messages.
- All trades received from Euronext, Deutsche Borse & Borsa Italiana can be netted with trades received from alternative
venues. Therefore no additional settlement costs are introduced.
- Clearing Members are charged the clearing fees of the European tariff, ensuring volume is rewarded through scale and a
further 5% discount is offered on all market transactions irrespective of venue.
- The fees charged by EuroCCP on Preferred Clearing venues are over 75% less than the primary CCP (based on average fees
charged across all members).