EuroCCP Completes Final Testing for Turquoise Launch
EuroCCP announced today the completion of the final phase of end–to–end testing required for next month´s limited live testing of the Turquoise pan–European trading platform.
The final phase of testing involved the passing of actual data between EuroCCP and the Turquoise trading platform, all trading parties and Citi Global Transaction Services, who is acting as settlement agent.
"We are very pleased to have passed this critical milestone, well in advance of the actual soft launch of trading planned in mid–August," said Diana Chan, Chief Executive Officer of EuroCCP. "Throughout the development of our clearing and settlement platform, working closely with Citi, we have committed ourselves to delivering a highly resilient and low cost solution for Turquoise."
In August, Turquoise will start trading in a limited number of European equities, and any firm that has been accredited with the platform and EuroCCP will be able to execute transactions in those shares. More equity issues will be phased in until all 1,500 securities are trading by the full launch, scheduled for early September.
The nine members of the Turquoise consortium are involved in about 50% of the total equity trading in Europe, and other trading members will add to the overall ability of Turquoise to generate liquidity for the platform.
"Essentially we have now completed a very inclusive and complex testing process," said Trevor Spanner, EuroCCP´s Chief Operating Officer. "Trading firms have been involved in submitting scripted trades that are executed on the Turquoise platform which are then forwarded to EuroCCP. EuroCCP validates the trades, nets them down, sends settlement instructions to Citi and the settlement agents selected by the participants, and sends relevant reports to all parties."
"Before the end of the year, we expect at least 20 clearing members of EuroCCP," Chan said, "and an additional 40 or 50 trading members that clear and settle through them. Other firms are still in testing and will be ready prior to the August launch, and any new firms who want to become clearing members of EuroCCP also will have to go through a testing period before being allowed to clear and settle.
"We expect EuroCCP to be the lowest cost provider in Europe for clearing and settlement services. And based on our research of publicly available fee schedules posted on our competitors´ web sites, we are well ahead in meeting our goal," she noted.
A comparative analysis conducted by EuroCCP in June found the average cost for clearing paid by financial firms was 26 eurocents across the 14 markets covered by EuroCCP services, whereas EuroCCP´s anticipated average cost will be 2.9 eurocents per transaction. EuroCCP´s highest cost is 6 eurocents per transaction.
Financial firms that use Turquoise and EuroCCP will gain advantage from using EuroCCP´s "at cost" business model that returns excess revenue to customers and that continually drives down fees.
About EuroCCP
European Central Counterparty Limited (EuroCCP), headquartered in London, is a subsidiary of The Depository Trust & Clearing Corporation (DTCC). It was formed to provide clearing and settlement services for a wide range of multilateral trading facilities across Europe. It will initially clear and settle equity trades in 14 countries and in seven different currencies. For more information, visit www.euroccp.co.uk.
About DTCC
The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage–backed securities, money market instruments and over–the–counter derivatives.
In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products. DTCC´s depository provides custody and asset servicing for more than 3.5 million securities issues from the United States and 110 other countries and territories, valued at $40 trillion. Last year, DTCC settled more than $1.8 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.