EuroCCP Introduces Comparability of All-in
Trading Costs
-First European Equities CCP to provide clearing cost data in same format as trading fees
March 23, 2010 04:03 AM Eastern Daylight Time
LONDON--(EON: Enhanced Online News)--EuroCCP announced today it has introduced an enhanced billing
feature that provides a new level of cost transparency to its customers. The new feature enables customers to easily
aggregate trading and clearing costs into a single unit to arrive at an all-inclusive cost of trading, clearing and
settlement.
EuroCCP now provides a monthly billing supplement to customers that shows clearing costs on the value of trades
cleared. Settlement costs are likewise shown on the value of trades cleared.
Clearing fees are typically based on a fixed fee per trade cleared, irrespective of value, while trading fees are based
on the value of the trade. The difference in fee structure has made it difficult for firms to estimate and compare all-in
costs on trading venues, particularly if they use different CCPs.
EuroCCP is the first equities central counterparty in Europe to present post-trade and trading costs in equivalent
terms to enable an estimation and comparison of all-in costs. Clearing and settlement costs billed to customers are
shown in basis points on the value cleared, consistent with fees charged by trading venues on the value of trade
executions. A basis point is 100th of one percent.
EuroCCP’s presentation of clearing costs in basis-point terms also facilitates the inclusion of clearing and settlement
costs in smart order routers, enhancing trading firms’ ability to manage clearing costs effectively. Cost predictability is
essential for trading firms.
Robert Barnes, Managing Director, Equities, at UBS Investment Bank commented, “EuroCCP should be
commended for enhancing tariff transparency. Cost-per-ticket trends are subject to bias, for example as electronic
trade sizes shrink. By adding value processed on its invoices, EuroCCP enables basis-point compara