SmartPool, a pan-European electronic block trading platform created by NYSE Euronext, HSBC and BNP Paribas has today announced that it has selected EuroCCP and LCH.Clearnet SA as its clearing and settlement service providers.
Both EuroCCP and LCH.Clearnet SA will support trading of European stocks offered on the platform. They will act as Central Counterparties, enabling anonymous post-trade processing, providing netting and a full range of risk management services to SmartPool. Citi’s global transaction services business will act as EuroCCP’s settlement agent and handle settlement in the respective Central Securities Depositories (CSDs).
SmartPool is a new multilateral trading facility (MTF) providing a dark pool for the execution of large institutional order flow in stocks from 14 European countries. The announced partnerships enables SmartPool to take a significant step closer to the delivery of the trading platform planned for after the summer, subject to regulatory approval.
“EuroCCP is thrilled to be chosen by SmartPool to support this multilateral trading facility,” said Diana Chan, Chief Executive Officer, EuroCCP. “We believe as we extend EuroCCP’s reach to a broader population of European trading platforms such as SmartPool, all financial firms—and end investors—will benefit from the economies of scale that come from increased volumes that clear and settle through our platform.”
“As CCP for Euronext’s markets we welcome this agreement to support SmartPool which underlines our desire and capacity to clear new markets and to respond to new initiatives introduced by the Markets in Financial Instruments Directive (MiFID). We hope that our clients will enjoy substantial economies as we will set up offsetting at risk and settlement levels between SmartPool and Euronext’s markets”added Christophe Hémon, LCH.Clearnet SA’s Chief Executive Officer.
“SmartPool’s unique “open” business model, whereby we have agreements with two clearing providers, enables us to offer our future customers the most appropriate, competitive and attractive services and environment for the trading of European stocks. By offering a combination of EuroCCP/Citi and LCH.Clearnet we have selected the most efficient low-cost clearing solution for SmartPool customers,” said Roland Bellegarde, Head of European cash markets at NYSE Euronext.
LCH.Clearnet SA, as Euronext’s contracted central counterparty, will provide clearing services for stocks listed in the four Euronext markets: Amsterdam, Brussels, Lisbon and Paris. Settlement will be provided through the local CSDs. EuroCCP will provide services for the stocks traded in 10 other European countries: Austria, Denmark, Finland, Germany, Ireland, Italy, Norway, Sweden, Switzerland and the United Kingdom.
EuroCCP is headquartered in London and is a Recognised Clearing House (RCH) regulated by the Financial Services Authority (FSA). LCH.Clearnet SA, a wholly-owned subsidiary of LCH.Clearnet Group Ltd, is headquartered in Paris and is regulated as a bank and as a clearing house by French banking and market regulators, in co-ordination with the regulators of each country in which Euronext operates an exchange. Both CCPs have signed the European Code of Conduct governing clearing and settlement.
About EuroCCP
European Central Counterparty Limited (EuroCCP) is a subsidiary of The Depository Trust & Clearing Corporation (DTCC). It was formed to provide clearing and settlement services for a wide range of trading facilities across Europe. Headquartered in London, EuroCCP is a U.K. Recognised Clearing House regulated by the Financial Services Authority. EuroCCP’s goal is to provide clearing and settlement support for a comprehensive group of pan-European trading platforms and will initially clear equity trades in 14 countries in seven different currencies. For more information, visit www.euroccp.co.uk.
About LCH.Clearnet Group
LCH.Clearnet is currently owned 67.6% by users, 17.8% by exchanges with the balance of 14.6% being held by Euroclear. Upon completion of the Euronext share buy-back program in the first half of 2008, the Group will be owned 73.3% by users, 10.9% by exchanges and 15.8% by Euroclear.
LCH.Clearnet is committed to operating under strict principles of non-discrimination across its user base. LCH.Clearnet serves major international exchanges and platforms, equity, exchange-traded erivatives, energy, interbank interest rate swap markets and the majority of the Euro-denominated and sterling bond and repo markets.
About SmartPool
SmartPool will be a Multilateral Trading Facility (MTF), providing a dark pool for the execution of large institutional order flow, registered in the UK and supervised by the Financial Services Authority, (FSA). It has been created by NYSE Euronext in partnership with BNP Paribas and HSBC and in response to the European Union’s Markets in Financial Instruments Directive (MiFID), introduced on 1 November 2007. Headquartered in London, SmartPool will have its own management team and an independent board of directors.