EuroCCP-Turquoise Alliance To Reduce Spanish Trading Costs

Turquoise and EuroCCP, the pan-European cash equities clearing house, are offering a service to take advantage of recent reforms to the clearing and settlement of trades in Spanish equities, which are likely to lead to the reduction of costs for investors.

The reforms, known as Title V, facilitate the trading of Spanish equities on multilateral trading facilities (MTFs), by modifying the regulations governing Iberclear, the Spanish central securities depository, and simplifying settlement and registration processes relating to the sale and purchase of Spanish equities.

In the future, transactions that are subject to Title V may be settled bilaterally, without the participation of the stock exchange. Title V also removes the requirement for clearing houses such as EuroCCP to cross positions on the local exchange with a local broker.

By utilizing the new securities settlement and registration procedures authorized by Title V, the new service offered by EuroCCP and Turquoise will significantly reduce the operational costs of trading Spanish equities on Turquoise.

From 3 May 2011, the EuroCCP settlement fee for Spanish securities will be reduced from the current €2.42 to €1.00 and the EuroCCP clearing fee will be reduced from €0.07 per side to €0.03 per side, up to 100,000 sides on a participant's average daily volume.

Diana Chan, CEO of EuroCCP, says that while Spain is home to some of the most liquid stocks in Europe, to date Spain's post-trade infrastructure rules has prevented the evolution of the type of competitive markets that have helped drive transaction volumes in other parts of Europe.

Chan expects the Title V reforms, coupled with other initiatives currently under discussion, to help address this anomaly, resulting in more competition and increased liquidity for Spanish stocks.

In conjunction with these changes, from 3 May, Turquoise will offer a three-month pricing promotion for trading Spanish stocks on its Integrated Order Book or until daily consideration reaches €100mln. During this period the "take" fee will be reduced to zero, while the "maker" rebate will be unchanged at 0.2 basis points.