EuroCCP and EMCF to merge

15 March 2013

The EuroCCP cross-European cash equities clearing business has agreed to merge with the European Multilateral Clearing Facility (EMCF). The new enlarged clearing house will rely on the risk management infrastructure and customer base of EuroCCP, but run on the EMCF technology ecosystem.

The new venture will be evenly owned by four players, with the DTCC, which owns EuroCPP and recently launched a trade repository in Japan , sharing the entity with a new partner in Bats Chi-X Europe and the EMCF owners: ABN Amro Clearing Bank and Nasdaq OMX. All the participants are of course gearing up for the changed market conditions and new post-crash regulations coming into force now for centralised over-the-counter (OTC) clearing and planning to meet demands for more transparency, collateral and efficiency.

The new to form the new clearing house, which will be called EuroCCP and headquartered in Amsterdam, will cut the respective players collateral obligations, lead to a cut in users’ connectivity and settlement costs due to rationalisation and economies-of-scale savings. Diana Chan, the present EuroCCP chief executive officer (CEO), Diana Chan, will continue in her role at the enlarged firm, while the head of EMCF, Jan Booij, will become chief operations officer (COO). The link-up is subject to the usual regulatory approvals.

"The new central counterparty (CCP) clearinghouse will lead the way in encouraging greater competition between all cash equity clearing houses while driving down costs,” said Chan. “Following the launch of four-way interoperability, the industry must now consolidate in Europe to achieve economies of scale and respond to the changing needs of market participants."

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