Clients will be charged per netted transaction rather than per gross transaction. Euroclear UK & Ireland’s total charges (including settlement) to large-volume trading firms will drop to 0.9 pence per transaction compared with 2.2 pence per transaction.
Its combined trade netting and settlement fees, which currently represent less than 10% of the cost of a transaction on the London Stock Exchange, will decline to less than 5%.
As trading volumes increased over the past three years, Euroclear UK & Ireland has reduced its trade netting fee by more than 70%. The latest reduction and tariff restructuring means that the cost to clients for using Euroclear UK & Ireland’s trade netting service will have declined by 90% since 2006.
As a user-owned, user-governed market infrastructure service provider, Euroclear UK & Ireland does not operate on a profit-maximisation basis. In this respect, modest changes in fee structures across a range of other Euroclear UK & Ireland services will also be implemented on or soon after 1 March.
Yannic Weber, CEO of Euroclear UK & Ireland, said: “We thank our clients, the Association for Financial markets in Europe (AFME) and other securities market representatives for participating with us during the consultation process to affirm the trade netting model and tariff structure they prefer.
“Euroclear UK & Ireland will, of course, continue to provide trade netting services, as requested by our clients. The new tariff reductions reinforce our willingness and flexibility to identify new ways to provide value at a reasonable cost for our clients. Given the long-term and constructive business relationships we have with the London Stock Exchange, LCH.Clearnet and SIX x-clear in particular, we have also taken into account the competitive pressures these business partners are currently experiencing.”
Euroclear UK & Ireland is a wholly owned subsidiary of Euroclear. The Euroclear group also includes Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and the international central securities depository, Euroclear Bank.
Euroclear also owns EMXCo, a UK provider of investment-fund order routing, and Xtrakter, owner of the TRAX trade matching and reporting system. In 2009, the Euroclear group settled the equivalent of EUR514 trillion in securities transactions, representing 180 million domestic and cross-border transactions, and held more than EUR20 trillion in assets for clients.
