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EuroCCP Introduces Clearing Service for U.S. Equity Issues

European trading firms can trade U.S. securities on various Pan European platforms during the day and settle those trades at DTC.

EuroCCP has launched a new service offering central counterparty clearing of trades in U.S. stocks and U.S. exchange-traded funds (ETFs) to European trading firms, where the trades will settle at Depository Trust Company (DTC).

EuroCCP is the first European equities central counterparty (CCP) clearing U.S. securities and settling them directly in the central securities depository in their home market of issue, The Depository Trust Company (DTC). EuroCCP is the European subsidiary of The Depository Clearing Corporation, and is headquartered in London.

EuroCCP’s service gives European trading firms their first-ever opportunity to trade U.S. securities on a variety of Pan European platforms during European trading hours and to settle those trades in DTC. According to EuroCCP, this provides European trading firms with a more cost-effective post-trade solution.

This clearing service for U.S. issues allows EuroCCP to extend the efficiency, cost-saving and counterparty risk protection benefits it already provides to clients’ European-listed securities transactions to U.S. stock and U.S. ETF transaction. Initially, the U.S. securities eligible for clearing through EuroCCP include approximately 100 stock issues and 50 ETFs. EuroCCP expects to expand over time the scope of eligible instruments to further equities, ETFs, and to ADRs.

“With our new service, we expect to encourage the development of liquidity in US equities in Europe. European trading firms will have a centralized clearing solution to facilitate their trading of US securities on multiple European trading venues,” commented Andrew Simpson, EuroCCP’s head of Product Management in London.

According to Simpson, EuroCCP is “leading the way by providing European investors with the most comprehensive array of central counterparty services on a single post-trade platform — and at the same time offer a lower-cost settlement alternative than previously available to firms trading in Europe.” Simpson said EuroCCP is “focused on delivering services that reflect the demands of firms, making it easier to build trading strategies across multiple asset classes—US and European equities issues, GDRs and Exchange-Traded Funds — and driving down the cost of post-trade.”

EuroCCP's clearing service for eligible issues in U.S. equities and ETFs is open to any trading venue cleared by EuroCCP.

The new clearing service increases the number of markets cleared by EuroCCP to 19, which the company contends is more than any other European equities CCP.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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