EuroCCP is a subsidiary of The Depository Trust & Clearing Corporation (DTCC). EuroCCP is a UK Recognised Clearing House (RCH), approved by the FSA, and is headquartered in London. It will provide clearing and clearing, settlement and risk management services to Turquoise, a consortium of major financial institutions that are developing a new pan-European trading platform, and other multilateral trading facilities and exchanges in Europe. Citi's global transaction services business will serve as EuroCCP settlement agent.

EuroCCP is a London-based subsidiary of DTCC, which means it will be a legally separate organization. EuroCCP and the U.S. subsidiaries will share technology systems, but will have separate management, financial, operations, technical support and customer service personnel. EuroCCP will be based in London.

EuroCCP is a wholly owned subsidiary of DTCC. However, it will have a user-governed board of directors, initially mostly from participant firms, although it will have three independent directors and two members from EuroCCP management.

While that question is best answered by Turquoise. we did offer them a number of key points about our strengths in the RFP process, including:

     >> Extensive central counterparty (CCP) knowledge and experience, and expertise in settlements and asset servicing
     >> Highly scalable platform
     >> Industry owned, “at-cost” structure
     >> Leading business continuity capabilities
     >> Tested and proven risk management capabilities
     >> Proven ability to execute on large scale projects
     >> Excellence in customer service.

As EuroCCP’s settlement agent, Citi global transaction services offers extensive securities operations capabilities across the European markets and beyond, including settlement capabilities already in place with European central securities depositories.

EuroCCP will accept trades from the trading platforms, and these trades will then be netted on trade date. EuroCCP will guarantee trades upon receipt and validation. For all trading members that are not clearing members of EuroCCP, these trades will be handled through general clearing member relationships.

EuroCCP will apply risk-based margining, with appropriate levels of margin collected on a daily basis. Any unsettled obligations will be marked-to-market each day. Settlements will occur in segregated accounts at each local central securities depository. Citigroup will process EuroCCP’s settlement instructions for delivering and receiving securities at the local CSD and receiving and delivering related payments in various supported currencies.

We will be clearing and settling trades, in partnership with Citi GTS, who is our settlement agent, initially in 14 different European markets: Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland and Sweden. We will be adding additional markets later. We will be handling trades in seven different currencies: the Euro, British Pound, U.S. Dollar, Swiss Franc, Danish Krone, Swedish Krona, and Norwegian Krone, although that will be expanded as well in later phases.

All trades need to be successfully cleared and settled in a reliable, quick and cost-efficient manner – and with an appropriate risk management process in place. So, post-trade clearing and settlement is an essential part of a trading platform. The same requirements apply to other trading platforms which use EuroCCP for clearing and settlement.

Yes. Our agreement with Turquoise is not exclusive, so we have the ability to do clearing for other organizations if we wish, and we are in active talks with a number of such platforms. By clearing and settling for multiple platforms, we will reduce the amount of collateral that needs to be put up by participating firms at different platforms, since we will be able to net all trades from all participating platforms for such firms.

EuroCCP has signed the European Code of Conduct governing clearing and settlement.

EuroCCP will guarantee trades after receipt and validation of the trades.

EuroCCP will have a risk management system in place to collect and adjust clearing fund contributions on a daily basis from its participant firms, based on such factors as trading positions, market volatility, mark to market charges and other special charges. That margin will normally be all that is required to cover EuroCCP’s exposure. Any interest on collateral held by EuroCCP will generally be paid back to its participant firms.

EuroCCP is a UK Recognised Clearing House (RCH), headquartered in London. EuroCCP was approved by the FSA in the U.K. to clear and settle trades under their oversight. No other approval is necessary for pan-European operation, since such approval is passported to other European countries.

EuroCCP is a Recognised Clearing House based in London and regulated by the FSA. It will not be regulated by the SEC.