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40% of the Chi-X volume came to EuroCCP
from the incumbent. By 2013, EuroCCP and
the incumbent CCP on Chi-X and Bats started
talking about merging and EuroCCP N.V was
created after combining the two CCPs. The
combined company is now the largest equities
CCP in Europe clearing for nearly 30 trading
platforms, including not only for MTFs but also
a number of national stock exchanges.
Six years later, a choice of three interoper-
ating CCPs has been extended to 70% of all
equities trades in Europe. Choice of CCP for
a further 25% is expected to be offered by the
end of this year. The post-trade space is far
more efficient now with competitive clearing.
Many market participants were initially scep-
tical about interoperability. The doubters either
said it would never happen because of protec-
tionism, or that it would never work because
the risks could not be managed. But it did, and
it has proved to be a great success. In the 10
years I’ve been running EuroCCP, the market
has transformed considerably for the better.
Competitive clearing has brought clearing costs
down by more than 90%. If you were to add up
all those savings over the past 10 years, it would
easily amount to more than €1 billion. That was
a major accomplishment and we are very happy
to have spearheaded this change in Europe.
HM: What do you see as your legacy with Euro-
CCP and what does the next decade hold for the
company?
DC: EuroCCP has experienced a decade of
tremendous growth and has made a huge
difference in the market. I am very happy to
have been a part of that transformation of the
market and of EuroCCP, which has gone from
being the CCP to a single MTF to becoming the
most connected CCP in Europe, clearing also
for many national stock exchanges. We now
have access to 83% of the flow in Europe and by
year-end we expect to have 95%.
For the next decade, shared infrastructure for
equities clearing makes sense. It is demanding
to comply with new regulations so the fixed
cost component of running a CCP is always
rising. Investors in Europe are now paying
for more than 10 CCPs that clear equities.
The MTFs and national stock exchanges that
are served by the interoperating CCPs have
demonstrated that equities trading does not
depend on clearing as a strategic competitive
advantage. Investors in Europe would be better
off if post-trade costs are taken out by elimi-
nating duplicated infrastructure. EuroCCP is
co-owned and used as a shared infrastructure
by three stock exchanges – there is certainly
room for more to join.
It is also possible that EuroCCP will expand
geographically to other regions and time zones,
because there are emerging markets where the
market itself is very small, and running a CCP
involves a high fixed cost. Typically, smaller
emerging markets need cross-border flow
and that flow can come from the international
players who trade on the MTFs and exchanges
in Europe. These firms are used to equities
clearing working well in Europe, protecting
them against counterparty risk and being
inexpensive. These firms will be cautious about
counterparty risk in emerging markets without
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