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(This is just a
draft, final version tomorrow. There is a lot of analysis I need to add, but
the charts are mostly done)
Backgroung on The
Depository Trust & Clearing Corp (DTCC)
…
A comment letter to the SEC explaining the abysmal failure of Regulation SHO to
date.
(emphasis mine) [my
comment]
OT..Subject:
File No. S7-12-06
Subject:
File No. S7-12-06
From: Lynn KeithSeptember 15, 2006
September 15, 2006
Ms. Nancy M. Morris, Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-0609
Re: Amendments to Reg SHO Release No. 34-54154
File No. S7-12-06
Secretary Morris:
Thank you for the opportunity to comment on the abysmal failure of
Regulation SHO to date, and specifically on the amendments the SEC is
proposing to fix it.
As other commenters have pointed out, Section 17A of the 1934 Securities
Exchange Act is very clear in mandating "prompt and accurate clearance
and settlement of securities transactions, including the transfer of record
ownership..."
Wall Street has become very adept at the "clearance" part of the
transaction -- that is, the taking of a customer's money for the
purchase of securities and the charging of commissions and fees for
the purchase of securities. But Wall Street has more and more ignored its
fiduciary duty in completing the "settlement" part of the
transaction that is, delivering the securities the customer has paid
for...even though non-delivery of stock is expressly forbidden by
Section 9 of the Securities Exchange Act. More often than not, what is
"delivered" is an electronic entry in the customer's account
representing an IOU for the security they purchased -- an IOU the customer is
completely unaware he holds, and which too often is unsupported by
any underlying share certificate.
This delinking of the clearance and settlement of transactions has
resulted in hundreds of millions of undelivered equity securities being
outstanding on any given day in the U.S. equities markets. This is
blatant and outright fraud -- the taking of money for a product which is
never delivered.
As far as elimination of the Grandfather Exception to Reg SHO, I find it
ironic that the SEC would even ask for comment on something which is so
clearly illegal and in such obvious violation of Section 17A of the
1934 Securities Exchange Act to begin with. The SEC does not now, nor
has it ever, had the authority to exempt illegal behavior. Period. What
on earth was the SEC thinking when it allowed implementation of the
Grandfather Exception? Section 36 of the 1934 Act specifically
prohibits the SEC from creating any exceptions to the 1934 Act except
"...to the extent that such exemption is necessary or appropriate in the
public interest, and is consistent with the protection of investors."
Allowing Wall Street firms to continue to NOT deliver the securities their
customers have already paid for -- which is what the Grandfather Exception to
Reg SHO does -- is nothing more than condoning and institutionalizing
fraudulent activity and theft which has already taken place. The Grandfather
Exception must be eliminated. DTCC participants and options market
makers have had well over a year and half to close out the fails which
existed when Reg SHO was first implemented. If they have not
done so by now, they obviously don't intend to, and these fails
should be immediately bought-in. That the grandfathered fails have not been
closed out by now is testament to the confidence naked short sellers and
their facilitators have that their powerful allies at the DTCC will continue
to protect them from any enforcement of SEC delivery rules.
It is noted that this blatantly illegal "grandfathering" provision
was NOT part of the proposed Reg SHO language which was originally put out
for public comment prior to Reg SHO implementation. No wonder. I guess even
the SEC was too embarrassed to risk doing that.
One can only assume that the SEC was convinced by DTCC participants--i.e.,
powerful Wall Street interests--that the fail-to-deliver problem was so
pervasive and so systemic in the U.S. markets that there was risk of a market
meltdown if they were actually forced to deliver all the securities they had
fraudulently created out of thin air and "sold" to their
unsuspecting customers over the years. And as they so often have over
the last 35 or so years, the SEC caved in and did what Wall Street wanted …
… the 11,000 DTCC participants are able to loan out over and
over and over again the same shares, and are able to sell shares which don't
exist, much of the time never delivering to buyers the securities
they thought they had bought, but instead are allowed to deceitfully
mark their customer account statements as if they had delivered the shares…
to the clear detriment of investors' retirement and investment
accounts.
…
By whatever name you call it -- market manipulation, naked short selling,
failing to deliver, or stock counterfeiting -- it all describes
fraudulent stock trades that have become a spreading cancer in the system
-- a malignancy that threatens to bring down the entire U. S. equity market.
As a long-time observer and investor in the U.S. markets, it appears to me
that the "...prompt and accurate clearance and settlement of security
transactions..." mandate of the 1934 Securities Exchange Act began
to unravel about the time of the formation of the DTC and the NSCC--and
later, the DTCC. These organizations, formed in response to the
paperwork crisis of the late Sixties, were staffed and advised by people who
had Wall Street's best interests at heart -- not investors. …
…
For the SEC to remain true to its Congressionally mandated mission, it
must realize that the DTCC is not its friend. It is not the friend of
investors. Its sole motivation is to increase and protect the profits
of its 11,000 participant firms. Asking--or assuming--that this organization
will adhere to the investor protection mandates of the 1933 and 1934
Securities Exchange Act on the "honor system" will not work.
…
I note with shame--as should the SEC--the comment letter from Research
Capital Corporation (RCC), a Canadian brokerage firm that has tried to
"buy-in" failed deliveries of Overstock.com on 39 separate
occasions. In each attempted buy-in, the failed delivery has simply
been replaced by another delivery commitment which also fails. [a "buy-in"
is basically a process to force delivery of securities.]
This brokerage firm also states it has requested proxies for its clients
which it is not receiving -- which reveals another problem engendered by
naked shortselling. That is, the massive over-voting of proxies.
A number of independent studies, as well as work done by the Securities
Transfer Association, has revealed that over-voting has taken place in
every single company studied. Such over-voting means only one thing:
That there are far more people and institutions who think they own shares
than there are legitimate shares to go around, and that there are millions of
"phantom" or "counterfeit" shares in clients' accounts --
IOU's with no underlying stock certificates supporting them. ADP actually
has an algorithm that "adjusts" shareholder votes by throwing out
votes, making a mockery of the shareholder rights which are supposed to
attach to share ownership.
As Frank Partnoy, law professor at the University of San Diego, has noted,
"It might seem incredible, but shareholder voting in developed
countries is more tainted than voting in undeveloped ones. Some
shareholders' votes are counted, others are not."
Since the clearance and settlement system of the U.S. securities
markets has been so badly corrupted and is currently dysfunctional,
RCC suggested in its comment letter that the SEC review the buy-in rules of
other countries, including those used in Canada. They could also have
suggested Australia, Japan, Euronext, the London Stock Exchange,
Singapore, Austria, and Germany. All of
these countries and exchanges have strict share delivery requirements,
and all function very well without the numerous delivery
"exceptions" allowed by the SEC for certain favored Wall Street
groups.
Is it not embarrassing that the capital markets of all these other countries
are more honest in their clearing and settlement processes than the United
States? [DTCC is bringing the America's "clearing and settlement
processes" to Europe through its subsidiary, the EuroCCP]
Unfortunately, RCC is not the only foreign company to see the U.S.
securities market for the way it is. While Wall Street/DTCC interests
have been successful in having most New York financial publications--which
they largely control--downplay the magnitude of the fail-to-deliver problem,
a perusal of foreign media and investor message boards and internet blogs,
all with an international audience, clearly shows that the perception
is growing all over the world that the U.S. equity securities markets are as
crooked, corrupt and manipulated as those of any third world country...and
that the SEC is doing nothing about it.
…
[Read entire letter here]
…
Dollar to Euro chart
Closer look at EuroCCP Activity and the dollar rally
1) Six year dollar rout
…
2) EuroCCP begins operations in August 2008
EuroCCP reports that EuroCCP Completes Final Testing For
Turquoise Launch.
EuroCCP
Completes Final Testing For Turquoise Launch
Low
Cost Clearing and Settlement Solution to Support Pan-European Trading
London, 24 July 2008
…
In August, Turquoise will start trading in a limited number of European
equities, and any firm that has been accredited with the platform and
EuroCCP will be able to execute transactions in those shares.
More equity issues will be phased in until all 1,500 securities are
trading by the full launch, scheduled for early September.
The nine members of the Turquoise consortium are involved in about 50%
of the total equity trading in Europe, and other trading members will
add to the overall ability of Turquoise to generate liquidity for the
platform.
"Essentially we have now completed a very inclusive and complex
testing process," said Trevor Spanner, EuroCCP's Chief Operating
Officer. "Trading firms have been involved in submitting scripted trades
that are executed on the Turquoise platform which are then forwarded to
EuroCCP. EuroCCP validates the trades, nets them down, sends
settlement instructions to Citi and the settlement agents selected by the
participants, and sends relevant reports to all parties."
…
A comparative analysis conducted by EuroCCP in June found the average cost
for clearing paid by financial firms was 26 eurocents across
the 14 markets covered by EuroCCP services, whereas EuroCCP's anticipated
average cost will be 2.9 eurocents per transaction. EuroCCP's
highest cost is 6 eurocents per transaction.
Financial firms that use Turquoise and EuroCCP will gain advantage from using
EuroCCP's "at cost" business model that returns
excess revenue to customers and that continually drives down
fees.
[What kind of firms "returns excess revenue to customers"?]
--------------------------------
3) Turquoise launches on September 22 with six months liquidity agreements
from investment banks
Euroccp reports that Turquoise pan-European trading platform
clearing extends to 1,300 securities in 13 European national markets.
Five New
Firms Sign Up With EuroCCP As Turquoise's Clearing, Settlement Provider Sees
Transaction Volumes Hit 400,000 a Day
Volume Surpasses Fee Discount Threshold Just Three Weeks After Start;
Seamless Introduction Of Services To The New Trading Platform
London, 22 September 2008 - European Central Counterparty
Limited (EuroCCP) announced today that it has already hit a peak volume day
of 400,000 transactions as clearing and settlement services for the
Turquoise pan-European trading platform extends to 1,300 securities in
13 European national markets.
In addition, EuroCCP announced that five new customers have signed on
to use its low-cost clearing and settlement platform, including
Landsbanki Securities (U.K.), MF Global U.K., Numis Securities Ltd., Parel
S.A., and Pershing Securities Ltd, bringing the total number of
clearing participants to 20 firms.
EuroCCP began initial operations on 15 August in two markets, Germany
and U.K., involving just a handful of securities. During the next
five days, 11 more markets were added. The number of securities was increased
rapidly over the next three weeks.
Trade volume on Turquoise is expected to reach at least 5% of the total
European trading volume in the stocks by year-end, according to Eli
Lederman, Chief Executive Officer of Turquoise. Lederman noted recently that Turquoise
volume was running about 1% of total volume in the stocks it trades
prior to entering full production.
In the period between launching across all 13 markets and securities on 29
August and 16 September, EuroCCP has cleared and settled more than 1.6
million sides and netted those transactions down by about 98% to 32,004
total settlement obligations. In addition, EuroCCP volume surpassed
400,000 transactions on 16 September, exceeding the threshold for a price
reduction for the first time. This threshold was achieved only 23 days
after the launch of EuroCCP's operations. Price reduction is based on
volume exceeding a 400,000 daily average for a calendar month, and average
volume probably will not exceed that level for September, but the 400,000
transaction milestone indicates that EuroCCP is achieving significant volume
increases in its initial month of operation.
"At Turquoise, we applaud EuroCCP's efforts to bring increased
efficiency and a lower aggregated cost for the combined process of trading,
clearing and settling trades. Customer feedback has been laudatory that
clearing and settlement activities have been going so smoothly to date in all
markets," said Eli Lederman, CEO of Turquoise. "Our success to date
only further underscores the confidence we had in EuroCCP's expertise and
knowledge."
r said Diana Chan, chief executive officer of EuroCCP. "Having
successfully reached this milestone, EuroCCP will continue to focus on
increasing our member base, the securities we process and the markets we can
settle at so that we can provide the fullest clearing and settlement
capabilities to trading platforms and to our participants."
EuroCCP has a pricing structure which is unique in the industry.
The volume thresholds apply to all trading platforms and all clearing
participants, regardless of their size. This means if the total volume
of transactions processed by EuroCCP averages above the pricing threshold for
an entire month, all clearing participants, regardless of how much
they trade individually and which platform they trade on, benefit from
the reduction in fees.
Liquidity
agreements
Efinancial News reports about Turquoise's liquidity agreements.
Liquidity
agreements
Prior to launch, Turquoise drew up liquidity agreements with its nine
shareholders – the original seven plus BNP Paribas and
Société Générale – that obliged the
banks to offer prices on Turquoise for six months after launch and provide
the liquidity it needed to attract other customers.
Efinancial news
reports that Turquoise's nine investment bank
shareholders signed liquidity agreements.
…
Turquoise's nine investment bank shareholders signed liquidity agreements to
make markets on the system for six months after its launch on September 22
this year. However, volatile market conditions since then have meant
some banks have been losing money supporting Turquoise, and some have
suspended their commitments.
Traders interpret the move by Turquoise to broaden its range of backers as an
attempt to minimise the potential impact of one or more banks pulling
back from their market-making obligations when agreements run out at the end
of March next year.
…
Turquoise market share grew steadily from the system's launch on
September 22 to the start of last month, but its growth has slowed over
the past three weeks.
…
--------------------------------
1) Gold leasing use to create temporary surge in the dollar
…
--------------------------------
5) Six month liquidity agreements expire and DTCC's March 15 merger plan
is delayed
The Wall Street Journal reports that Turquoise Trade Volume Falls as Contracts
Expire.
MARCH
23, 2009
Turquoise Trade Volume Falls as Contracts Expire
By TOM FAIRLESS
Trading volumes at European stock market Turquoise fell by more than
half last week after agreements signed by its nine shareholder banks to trade
on the system expired.
Turquoise, founded by nine of the world's largest investment banks to
increase the competitive pressure on Europe's main stock markets, has been
doing well since its launch. The London system has expanded its market
share in all of Europe's main share indexes and earlier this month was
handling nearly 7% of the U.K.'s FTSE 100 trading, 8.2% of the French CAC-40
index and 9.4% of Dutch blue chips.
Last week's slowdown came after Turquoise's investment-bank backers
were released from contracts requiring them to make markets in certain stocks
for six months, an arrangement designed to draw liquidity to the
system as it found its feet.
The value of shares traded on Turquoise between Monday and Thursday last week
slid to €3 billion ($4.1 billion), down 51% from €6.1 billion the
same period in the previous week, according to Bats Trading. The system's
share of European stock trades averaged 3% last week, compared with 5.6% the
previous week.
…
Turquoise's slump follows a period of growth. Turquoise had
a record month in February, with stock volumes rising 11% from the previous
month to €29.1 billion, even as volumes at many other European markets
declined, according to financial software group Fidessa.
Eli Lederman, Turquoise's chief executive, said the drop-off in volumes had
been significant but less than the market had anticipated. "We knew
there would be some drop-off in volumes when the liquidity agreements
ran out," he said.
Efinancial News
reports that liquidity agreements signed by its nine
investment bank shareholders run out.
March
2009
Six months after the launch of Turquoise the liquidity agreements
signed by its nine investment bank shareholders run out and the
exchange has to stand on its own two feet for the first time
April 2009
Turquoise's UK equity market share, which was 7.5% in February,
halves to 3.6% and the extent to which the liquidity
agreements were propping up Turquoise becomes clear
The DTCC's merger plan with LCH.Clearnet, intended to be finalized on March
15, is pushed back to the end of March.
--------------------------------
6) DTCC scraps LCH.Clearnet merger talks
Reuters reports that DTCC scraps LCH.Clearnet merger talks.
DTCC
scraps LCH.Clearnet merger talks
BRUSSELS/LONDON
Wed Apr 29, 2009 8:29pm BST
BRUSSELS/LONDON (Reuters) - The
U.S. Depository Trust & Clearing Corp (DTCC) scrapped its $979 million
(664 million pound) merger plan with LCH.Clearnet on Wednesday,
paving the way for a rival consortium to pick up Europe's biggest independent
clearing house.
A 12-member group led by Deutsche Bank (DBKGn.DE) and ICAP (IAP.L) is working
towards making an offer for LCH.Clearnet by May 29, people familiar with the
matter said previously. The consortium recently assured LCH.Clearnet it is
still interested in a deal, a source familiar with the consortium, who was
not authorized to speak for it publicly, told Reuters on Wednesday.
Analysts said interest in the London-based clearinghouse highlights an
overall renewed focus on lucrative European clearing, but DTCC's backdown
shows there is regulatory and political resistance to any
trans-Atlantic merger.
"DTCC has continually communicated its desire to complete a
successful merger to both the management and to the board of
directors of LCH.Clearnet," the DTCC said in a statement.
The U.S. clearer -- which handles all U.S. equities and already has
an offshoot in Europe, EuroCCP -- signalled frustration with its
retreat.
"DTCC sees no choice but to pursue other strategic alternatives
to develop seamless trans-atlantic clearing services to support the needs of
our customers and the industry," it added.
…
EUROPEAN HANDS
Despite signing a non-binding agreement in October 2008, the
DTCC-LCH.Clearnet deal has not yet overcome regulatory hurdles.
The DTCC deal had been only "a remote possibility for some time"
because of political and regulatory opposition to U.S. ownership of a
European clearing system, according to a banking source familiar with
the matter.
After the collapse of Wall Street bank Lehman Brothers, many European
regulators favoured a key European clearing infrastructure remaining in the
hands of European players. [Makes a LOT of sense]
"The consortium didn't want a big American company muscling in on their
territory," said Philip Silitschanu, a senior analyst at consulting firm
Aite Group. …
The Trade News
reports that Frustrated DTCC outlines post-LCH European strategy.
Frustrated
DTCC outlines post-LCH European strategy
Thu,
2009-04-30 17:32
Having walked out on merger talks with European clearing house
LCH.Clearnet, US post-trade utility DTCC is focusing on
developing its existing business in Europe, including pan-European clearing
facility EuroCCP and its Deriv/SERV matching and confirmation
service.
"We intend to compete aggressively in Europe for equity clearing
with EuroCCP," DTCC spokesman Stuart Goldstein told
theTRADEnews.com. Following EuroCCP's launch last September, it now clears
for three pan-European multilateral trading facilities (MTFs) –
Turquoise, SmartPool and NYSE Arca Europe. "We will announce another two
platforms as clients in the coming months and have been approached by others
to extend interoperability so they can gain access to EuroCCP,"
he said.
DTCC is also active in Europe via Deriv/SERV, which provides matching and
confirmation for credit default swaps (CDS), equity derivatives and interest
rate derivatives. A significant portion of the world's CDS trades emanate
from London. "We're already serving the European
marketplace," said Goldstein. "It is a question of now continuing
to grow the presence we have on the ground."
…
DTCC walked away from merger talks with LCH yesterday after months of
negotiations and due diligence. The firms announced their intention to merge
on 22 October last year and had originally intended to finalise the
deal on March 15. This was later pushed back to the end of March.
…
--------------------------------
7) Dollar resumes its downward path
…
--------------------------------
8) EuroCCP launches clearing/settling 120 of the most heavily-traded
listed Depositary Receipts
Netherlands Corporate News reports that EuroCCP Launches Clearing and Settlement
for Depositary Receipts.
EuroCCP
Launches Clearing and Settlement for Depositary Receipts
New service offering will clear a wide selection of Europe's Depositary
Receipts, and provide most convenient settlement location
LONDON--(BUSINESS WIRE)-- 20091013 --
European Central Counterparty Limited (EuroCCP) today announced that on
16 October it will begin clearing and settling 120 of the most heavily-traded
listed Depositary Receipts. With its new central counterparty service
offering, EuroCCP extends to Depositary Receipts transactions the efficiency,
cost-saving and counterparty risk protection benefits it already provides to
clients' equities transactions.
EuroCCP has further extended its relationship with Citi's Global Transaction
Services, by appointing the firm as EuroCCP's settlement agent for these
instruments.
In addition to clearing a wide selection of Depositary Receipts in Europe,
EuroCCP's service will stand out by providing most convenient settlement
location. Initially all transactions will settle at Euroclear Bank. Some
ISINs are eligible both at Euroclear Bank and the Depository Trust Company
(DTC) and, for these, after the initial period, the settlement location will
be determined at the ISIN level at the one location most convenient to the
majority of participants--either Euroclear Bank or DTC. This approach will
facilitate customers' position management, limit customers' need for
cross-border realignments, and help to reduce overall processing costs.
Commenting on EuroCCP's new Depositary Receipts service offering, James
Cressy, head of EuroCCP Operations, said: "Diversification of the
instruments covered by EuroCCP clearing and settlement offers new levels of
safety to the markets by extending our central counterparty clearing to a new
category of securities. There was clear market interest in the EuroCCP
Depositary Receipts service offering, and we worked in close cooperation with
our users to develop it."
Depositary Receipts transactions cleared and settled through EuroCCP will be
priced at the most competitive levels now available in Europe, with fees
starting at 3 euro cents per side (€0.030) and falling to one-fifth of
euro cent (€0.002) per side. And for those transactions subject to
voluntary corporate actions, EuroCCP will offer buyer protection by allowing
customers to make elections on failing positions.
Turquoise will be the first multilateral trading facility (MTF) to offer
trading in Depositary Receipts cleared through EuroCCP. Virtually all of
these issues are priced in US dollars.
According to Tom Isaac,Global Head of Client & Sales Management for
Financial Intermediaries, Citi, "Citi is extremely pleased to continue
to build its relationship with EuroCCP to include the settlement of
Depositary Receipts. This appointment reflects Citi's ongoing commitment
and ability to support the needs of central counterparties in this region. We
look forward to continuing to work with EuroCCP as it expands its clearing
capabilities into new instruments and markets."
Depositary Receipts are transferable securities that represent
ownership of a specified number of shares in a foreign company.
Listed and traded independently from the underlying equity, Depositary
Receipts enable traders to invest directly in high-growth economies in an
easy and cost-effective way. They comprise a significant segment of
the international securities markets business today.
The new service marks the latest addition to EuroCCP's ongoing programme of
innovation, which includes a significant restructuring of fees and expansion
into further financial instruments and market sectors. EuroCCP, which
currently clears and settles trades for four MTFs, in January 2010 will
extend its services to the national exchanges owned by NASDAQ OMX in Denmark,
Finland and Sweden.
Effective 1 October, EuroCCP implemented a new, tiered fee structure
that leverages the company's economies of scale to deliver Europe's most
competitive pricing. Volume discounts are calculated at the
participant level, which provides significant value to high-frequency trading
firms now operating across multiple markets.
--------------------------------
9) Turquoise extends service to include six Exchange Traded Commodities
Efinancial News reports that Turquoise eyes diversity with commodities
launch.
Turquoise
eyes diversity with commodities launch
Tom
Fairless
28 Oct 2009
Turquoise,
the UK-based trading system backed by nine banks, has become the latest
alternative equities market to diversify into commodities, as it pursues
"business as usual" despite ongoing talks to sell itself to the
London Stock Exchange.
Turquoise said it will launch six exchange-traded commodities on its
main trading platform on November 13. The new contracts will track
the performance of gold and silver, as well as gold bullion indices
and will be cleared through EuroCCP, the European unit of the
US Depository Trust & Clearing Corp, according to a statement.
The news comes four weeks after Turquoise introduced trading in 120 of
the most liquid depositary receipt contracts. Depositary receipts
allow investors to trade stocks in overseas companies, while avoiding the
cost of holding and trading international shares.
Eli Lederman, Turquoise's chief executive, said the move into commodities
represented "a natural extension to our service".
He said: "The addition of exchange-traded commodities shows we are
continuing to listen to our members who want wider product coverage, and it
recognises that investor appetite for ETCs has picked up substantially
in recent months."
The move comes as Turquoise pushes ahead with exclusive talks to sell itself
to the LSE, as first reported by Financial News earlier this month.
Lederman said: "We are operating in 'business as usual' mode in parallel
with ongoing talks with the LSE. We continue to think about the future, and
adding breadth to our product coverage is key to this, with small steps like DRs
this month and ETCs next month, and potentially
more significant additions ahead."
--------------------------------
10) EuroCCP Begins Clearing Exchange-Traded Currencies (Currency ETCs)
Dbusinessnews.com reports that EuroCCP to Begin Clearing Exchange-Traded
Currencies.
February
3, 2010 0830 +0000 UTC</DIV
EuroCCP to Begin Clearing Exchange-Traded Currencies
LONDON--(BUSINESS WIRE)-- EuroCCP today announced
that on Friday, the 5th of February, it will launch clearing services
for European-listed Exchange-Traded Currencies (Currency ETCs),
continuing to extend to new instruments the efficiency, cost-saving and
counterparty risk protection benefits it currently provides to clients'
equity and Depositary Receipts transactions.
Turquoise will be the first multilateral trading facility (MTF) to offer
trading in Currency ETCs cleared through EuroCCP.
Currency ETCs are liquid securities traded on exchange that track the
performance of underlying currency indices. EuroCCP initially will
clear 18 Currency ETCs, which provide long or short passive exposure
to the currencies of G-10 countries versus the US dollar. To view the
list of EuroCCP-clearable Currency ETCs, please go to http://www.euroccp.co.uk/.
"EuroCCP is pleased to extend our clearing services to support the
trading of Currency ETCs. By providing a safe post-trade environment, we
believe this service offering will encourage liquidity," said Andrew
Simpson, head of EuroCCP Product Management in London. "Our ETCs
clearing service responds to investor demand for liquid, secure and
transparent exchange-traded securities and also reflects increased
investor appetite for foreign exchange instruments."
Adrian Farnham, Chief Operating Officer at Turquoise, commented:
"Currency ETCs are presenting the European market with new trading
opportunities. Turquoise is delighted to provide highly efficient access to
such an expanding market, along with the competitive pricing schedule and robust
technology that the Turquoise MTF already offers for equities and depositary
receipts."
Listed in both USD and GBP, ETC transactions cleared through EuroCCP will
settle in CREST.
ETCs trade on a regulated exchange, just as an equity is traded. An issuer
creates (and redeems) the ETC security with the assistance of an Authorised
Participant/Market Maker, and each ETC is assigned an ISIN when listed on
exchange.
…
--------------------------------
11) EuroCCP expands clearing into Hungary and the Czech Republic
Dbusinessnews.com reports that Turquoise and EuroCCP Launch Trading and
Clearing Services for Hungarian and Czech Republic Issues.
February
23, 2010 0830 +0000 UTC</DIV
Turquoise and EuroCCP Launch Trading and Clearing Services for
Hungarian and Czech Republic Issues
LONDON--(BUSINESS WIRE)-- EuroCCP and Turquoise today
announce they have expanded their respective clearing and trading
services into two additional markets, Hungary and the Czech Republic.
The move makes Turquoise the first multilateral trading facility (MTF) to
offer trading and EuroCCP the first pan-European CCP to offer clearing
services in the 25 components of the main Hungarian and Czech
indicesâ€"the BUX and PX indices, respectively.
EuroCCP's clearing services for Hungary and Czech Republic securities are
open to any trading venue to which it is linked that offers trading in these
securities.
Turquoise will offer trading in the Hungarian and Czech securities
cleared through EuroCCP from 26 February. The service further
extends Turquoise's pan-European equities, ETF and ETC coverage.
This service extension marks the latest in an ongoing series of
enhancements EuroCCP is bringing to Europe's clearing space. Earlier
this year, EuroCCP launched clearing services for listed Currency ETCs.
EuroCCP's expansion delivers the efficiency and risk mitigation benefits of
central counterparty clearing to a widening array of investors' transactions.
With the addition of Czech and Hungarian securities, EuroCCP's market
coverage grows to encompass securities issued in 17 national markets
and traded in nine different currencies.
EuroCCP has further extended its relationship with Citi's Global Transaction
Services, by appointing Citi as EuroCCP's settlement agent for these
securities.
Commenting on EuroCCP's expanded service offering, Andrew Simpson, head of
EuroCCP Product Management in London, said: "EuroCCP is continually
diversifying the markets and instruments we cover, in response to investor
demand. With the addition of Czech and Hungarian equity issues, we're
offering European market players the opportunity to invest in a larger
variety of securities in a safe environment, where counterparty risk
protection is available on all trades."
David Lester, CEO of Turquoise, commented: "We are delighted to be the
first pan-European trading platform to launch trading in Hungarian and Czech
equities, further extending the choice of securities for our clients. Through
these clearing arrangements, clients will benefit from the same
differentiated value and risk-managed clearing and settlement solution
offered currently for our existing European markets."
The securities newly eligible for clearing through EuroCCP
include 12 Hungarian ISINs and 13 Czech ISINs. To view the list
of eligible ISINs, please go to http://www.euroccp.co.uk/.
…
--------------------------------
12) Gold manipulation confirmed
…
--------------------------------
13) EuroCCP introduces clearing service for US equity issues
The New Statesman reports that EuroCCP introduces clearing service for
US equity issues.
EuroCCP introduces clearing service for US equity
issues
New Statesman
Published 15 April 2010
The European Central Counterparty (EuroCCP) has created a service offering
central counterparty clearing of trades in US stocks and US exchange-traded
funds (ETFs) to European trading firms.
EuroCCP's new service gives European trading firms an opportunity to
trade US securities on a variety of pan-European platforms during European
trading hours and to settle those trades in DTC. By offering a
service where US securities settle directly at the US CSD, EuroCCP provides
European trading firms with cost-effective post-trade solution.
Its clearing service for US issues allows EuroCCP to extend the efficiency,
cost-saving and counterparty risk protection benefits it already
provides to clients' European-listed securities transactions to US stock and
US ETF transactions.
Initially, the US securities eligible for clearing through EuroCCP include
approximately 100 stock issues and 50 ETFs. EuroCCP expects over time to
expand the scope of eligible instruments to further equities, ETFs, and to
ADRs.
EuroCCP's clearing service for eligible US issues is open to any trading
venue cleared by EuroCCP that offers trading in the securities. Trading
will be against US dollars. The new service increases the
number of markets cleared by EuroCCP to 19.
Andrew Simpson, head of product management in London at EuroCCP,
said: "With our new service, we expect to encourage the development of
liquidity in US equities in Europe. European trading firms will have a
centralised clearing solution to facilitate their trading of US securities on
multiple European trading venues.
"We are leading the way by providing European investors with the
most comprehensive array of central counterparty services on a single
post-trade platform [See my entry on *****Net Settlement And The Shortfalls Of
Clearinghouse Guarantees***** for more info on
the wonderful "counterparty services" offered by the DTC and
EuroCCP] - and at the same time offer a lower-cost settlement
alternative than previously available to firms trading in Europe [Ponzi
schemes have very low overhead cost on their trade settlement activity. The
EuroCCP is now passing these savings on to firms trading in Europe]. We're
focused on delivering services that reflect the demands of firms, making it
easier to build trading strategies across multiple asset classes - US and
European equities issues, GDRs and Exchange-Traded Funds - and driving down
the cost of post-trade."
Reuters reports
that LSE, NYSE offer US equity trading in
European time.
LSE,
NYSE offer US equity trading in European time
Wed Apr 14, 2010 8:16am EDT
* LSE's Turquoise to start April 23, NYSE Arca in Q2
* LSE uses Turquoise arm for strategic moves
* Clearing house EuroCCP and parent DTCC enable initiatives
* EuroCCP eyes greater business via low US post-trade costs
(Adds announcement by NYSE Arca, EuroCCP comment, details)
By Jane Baird
LONDON, April 14 (Reuters) - Rivals London Stock Exchange (LSE.L) and NYSE
Euronext (NYX.N) are both launching trading in U.S. equities during European
hours on affiliate platforms in a move to boost transatlantic trading.
Clearing house EuroCCP and its parent company, the U.S.
monopoly clearing and settlement firm Depository Trust and
Clearing Corp (DTCC), are enabling the moves by offering low
post-trade costs for U.S. securities.
The initiatives are likely to result in large volumes of transatlantic share
trading as low-cost alternative trading platforms take advantage of cheap
post-trade costs.
"For the first time, there will be low post-trade costs to trade U.S.
stocks," said Diana Chan, EuroCCP chief executive. "This is a step
towards transatlantic trading, allowing a few more hours window to
trade."
Turquoise, a pan-European trading platform 51 percent-owned by LSE, plans to
start by offering trading in U.S. dollars in 175 of the most liquid U.S.
stocks, American Depository Receipts (ADRs) and Exchange Traded Funds (ETFs)
from April 23, LSE said on Wednesday. "Trading U.S.
securities on Turquoise during European market hours will create new trading
opportunities for market makers, spread betting firms, proprietary trading
firms and arbitrageurs, and will build a pool of liquidity that institutional
brokers can leverage for the benefit of their customers," said David
Lester, chief executive of Turquoise in a statement.
Alternative platform NYSE Arca Europe said it would start offering the 100
companies in the S&P 100 index sometime in the second quarter of this
year, with other names likely to be introduced later.
EuroCCP, a relative newcomer that has made limited inroads into Europe's
crowded post-trade market, may gain additional clients from its ability to go
through its DTCC account to offer the same post-trade fees for high-volume
clients as it charges them in the United States.
For the LSE, the move shows how the exchange can use the more nimble
multilateral trading facility (MTF) structure of Turquoise to make strategic
moves to increase its business.
The Turquoise list will include ETFs based on the S&P 500 and
Nasdaq 100 indexes, MSCI country and regional indexes and major household
names such as Citigroup (C.N),
Apple (AAPL.O) and
Alcoa (AA.N), and
ADRs of key European names such as BP (BP.L) and
Vodafone (VOD.L), LSE
said.
The service will be free for three months and introduce a
maker-taker tariff system thereafter, LSE said. In such a system, market
players who post bid and offer prices on the electronic trading platform get
advantageous pricing.
Deutsche Boerse (DB1Gn.DE) also
offers trading in U.S. stocks during European time, using its affiliates
Eurex and Clearstream, which act as intermediaries to clear and settle on
DTCC.
Chan claimed that EuroCCP's post-trade service will be cheaper
-- as low as one-fifth of a euro cent per side for its largest clients, or the
equivalent of the one-third of a U.S. cent it charges them in the United
States.
Brokers and others will be able to net out their exposures --
setting long and short positions off against each other to reduce risk
exposure -- on Turquoise and on NYSE Arca, and clients large enough to
maintain DTCC accounts of their own in the United States will be able to net
easily via EuroCCP's account, she said.
EuroCCP also plans to seek UK regulatory approval to allow clients to
net their holdings directly with holdings in the United States, she
said. (Editing
by Louise Heavens)
--------------------------------
(I will finish entry tomorrow.)
Eric de Carbonnel
Market Skeptics
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