EuroCCP has launched a service offering central counterpary clearing of trades in US stocks and US exchange-traded funds to European trading firms.
EuroCCP is the first European equities central counterparty clearing US securities and settling them directly in the central securities depository in their home market of issue, The Depository Trust Company.
EuroCCP’s new service gives European trading firms their first-ever opportunity to trade US securities on a variety of pan-European platforms during European trading hours and to settle those trades in DTC.
By offering a service where US securities settle directly at the US CSD, EuroCCP provides European trading firms with a more cost-effective post-trade solution.
Initially, the US securities eligible for clearing through EuroCCP include approximately 100 stock issues and 50 ETFs. EuroCCP expects over time to expand the scope of eligible instruments to further equities and ETFs and to ADRs.
EuroCCP’s clearing service for eligible US issues is open to any trading venue cleared by EuroCCP that offers trading in the securities. Trading will be against US dollars.
“With our new service, we expect to encourage the development of liquidity in US equities in Europe. European trading firms will have a centralised clearing solution to facilitate their trading of US securities on multiple European trading venues,” says Andrew Simpson (pictured), EuroCCP’s head of product management in London. “We are 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.”
The new service increases the number of markets cleared by EuroCCP to 19, more than any other European equities CCP.