European Central Counterparty Limited (EuroCCP) will provide pan-European clearing and settlement services, partnered with our settlement agent, Citigroup, Inc. Those services will initially be provided to Turquoise, a consortium of seven major investment banks who are setting up a trading platform and clearing and settlement system of their own to compete in Europe with established trading venues.

Who can use the service:

Any firm who trades in Europe is eligible to use the Turquoise trading platform, either as a trading member or general member. Only general clearing members will be full members of EuroCCP. The membership requirements are currently under review with the Financial Services Authority (FSA) in London and will be available once they are approved by the FSA.

Download Service Description (pdf).

Benefits:

The benefits of clearing and settling through EuroCCP are:

• Low-cost clearing and settlement provided by a user-governed organization and operated on an "at-cost" basis. Any excess monies generated by our operation over and above that needed to operate the business is returned to users on a pro-rata basis.
• Pan-European capability means firms can trade in any security handled by Turquoise and settle in any of the central securities depositories in Europe where the securities are held through Citi's existing settlement network.
• Reliable technology developed and used by DTCC systems means delays and downtime are held to a minimum, with DTCC systems experiencing in excess of 99.9% availability.
• Business continuity capabilities that mean even during major events, EuroCCP will remain operational.
• Pan-European capability means less collateral will need to be held to cover trading thereby reducing costs, and all interest on that collateral will be refunded to your firm.
• Improved risk management means EuroCCP will hold the minimum amount of trading collateral needed, and firms are protected from a participant failure.
• Access to multiple currency settlement through Citi's settlement network, which extends throughout Europe's markets.

How the service works

EuroCCP will accept trades directly from the Turquoise trading platform and these trades will be netted on trade date. EuroCCP will guarantee trades against a counterparty failure upon receipt and validation. The clearing agency will mask the counterparty of the trade for full anonymity from trade through to settlement. For all trading members of Turquoise 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. Citi 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.

The currencies that will be initially supported for clearing and settlement by EuroCCP are: the euro, British pound, U.S. dollar, Swiss franc, Danish krone, Swedish krona, and Norwegian krone. Trades may settle in any currency supported, but only in those depositories where the currency is accepted. Countries/markets supported initially by EuroCCP and Turquoise include: Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland and Sweden. Additional currencies and countries may be supported in the future.

Initially, well over 1,000 of the most widely traded equities in Europe will be available for trading and clearing and settlement on Turquoise.

Collateral requirements are reviewed and may be adjusted daily. Cash collateral may be posted in any one of the supported currencies, and the currency chosen for cash collateral purposes is selected by the firm at the time it joins EuroCCP as a member.

For more information:

Please visit our Customer Centre for a list of contacts.

EuroCCP is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (DTCC).