EuroCCP, the pan-European central counterparty (CCP) which clears over 4,000 securities, has chosen Euroclear Bank, the Brussels-based international central securities depository (ICSD), as sole settlement provider for all US-listed equities transactions struck on Turquoise, the pan-European trading venue.
Trading transactions in US stocks listed and traded on the London Stock Exchange (LSE) owned Turquoise will be settled on behalf of clients at Euroclear Bank in any of the 54 settlement currencies offered by the ICSD, under the agreement announced today.
Clients of Turquoise and EuroCCP need make no adjustments - contractual or operational - assert the partners in order to be able to benefit from Euroclear Bank’s securities settlement and asset servicing tools, which will also assist financial market players in complying with changes to the regulations, reporting and collateral requirements on the world’s financial markets.
Turquoise says it is the only multilateral trading facility (MTF), as defined under the EU’s Markets in Financial Instruments Directive (MiFID) regulation, which is just now being updated, to offer a full range of US equities to its European customers.
According to Robert Barnes, formerly of UBS and now the chief executive officer (CEO) of Turquoise, the MTF already offers its customers’ access to 18 European markets through a single connection. “Today’s announcement increases the geographic diversification of the markets we offer to our customers and makes the process of trading US names - as well as in a European time zone - easier than ever,” he said.
For Diana Chan, CEO of EuroCCP, the link-up came about because: “We have a very good working relationship with Euroclear Bank and it is a natural evolution of this to now partner with them to settle all of Turquoise’s US-listed equities transactions.”
The proliferation of MTFs post-MiFID, such as Turquoise, has led to a whole-scale redrawing of how investors access and trade stocks, says Yves Poullet, CEO of Euroclear Bank, who went on to say that ultimately, those venues that attract the largest pools of equity liquidity can expect to flourish in the future. The game at the moment is to ensure you have coverage for the eventual winners.
“I am delighted to extend the current working relationship that we have for depository receipts with Turquoise and EuroCCP to US equities,” continued Poullet. “Our 1,300 clients can now benefit from full trade, clearing and settlement automation in blue-chip firms like Apple, Berkshire Hathaway, Exxon Mobil and Ford, to name but a few.”