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European Multilateral Clearing Facility N.V. (EMCF), Europe’s largest cash equity CCP, celebrates its fifth anniversary.
During the past five years, EMCF has seen clearing change rapidly from a landscape mostly divided along the lines of the national exchanges to a pan-European competitive market.
EMCF was launched in March 2007 to service the pan-European trading facility Chi-X Europe, which was launched by Instinet. Since then, it has gradually expanded its services to multiple platforms, markets and towards new participants.
Jan Booij, CEO of EMCF comments: “It sometimes is good to take a pause and look back at where we came from and what road we have traveled. The clearing landscape has changed more in these five years than in the 15 years preceding. The launch of pan-European trading platforms and clearers has had big effect, not only for the platforms and CCPs involved but equally for our clients – the trading and clearing participants. We have seen the introduction of CCP clearing in the Nordic region and the advent of interoperability”.
“We should also be grateful to our clients – both trading venues and clearing participants – as well as the Regulators. Without their continuous support, we would never have been able to achieve this” adds Booij.
We can find evidence of change in the way clearing fees have evolved. At launch, EMCF introduced a clearing fee of 28 eurocents for German and Dutch securities, approximately half the fee of the incumbent CCPs. Since then, EMCF has been able to lower fees while volumes have grown, to a level of 0.1 eurocent today.
In January, four-way interoperability was launched. The project, initiated with the Code of Conduct, delivers client choice and allows them to consolidate their flow with the CCP of choice. As consolidation drives most of the cost-gains of interoperability, it is essential that the number of trading venues that offer choice of clearing is expanded.
“EMCF will continue to cooperate with clients to offer innovative post-trade solutions. The clearing obligation as mandated by EMIR offers opportunities to expand our business into areas that previously settled as an OTC transaction. The first project delivered in this respect is the extension of our services to CATS, the OTC trading services operated by CITI. EMCF expects to extend its service offering for OTC” says Booij.
