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The New Statesman reports that EuroCCP
introduces clearing service for US equity issues.
(emphasis mine) [my comment]
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)
My reaction: The EuroCCP Fraud continues with the introduction of clearing service
for US equity issues.
1) On April 23, Clearing house EuroCCP and its parent company,
the U.S. monopoly clearing and settlement firm Depository Trust and Clearing
Corp (DTCC), enabled trading in U.S. equities during European hours on
affiliate platforms.
2) The list of US securities available for trading will include ETFs
based on the S&P 500 and Nasdaq 100 indexes, MSCI country and regional
indexes and major household names (Citigroup, Apple, Alcoa, etc).
3) The new service increases the number of markets cleared by EuroCCP to
19.
Too Cheap to be True
1) The Turquoise’s service to trade US equities will be free
for first three months.
2) EuroCCP's post-trade service is incredibly cheap, as low as the one-third
of a US cent the EuroCCP/DTC charges in the United States.
EuroCCP is allowing trade netting
1) Brokers and others will be able to net out their exposures
(setting long and short positions off against each other during post-trade
settlement) on Turquoise and on NYSE Arca.
2) Clients large enough to maintain their own DTCC accounts in the United
States will be able to net easily via EuroCCP's
account.
3) EuroCCP also plans to allow clients to net their holdings
directly with holdings in the United States,
EuroCCP move allows for greater naked short selling of the euro (via net
settlement)
Thanks to the EuroCCP’s move, Wall Street firms now can sell US
equities, collecting billions of euro. They can then take the opposite side
of the trade, netting their settlement obligation at the EuroCCP to zero.
Finally, the collected billions of euros are used to buy dollars and US
treasuries. Here is an example of how it works:
1) Goldman receives euros from European clients.
2) Goldman buys 100 shares of Apple through Turquoise/EuroCCP on behalf of
those European clients.
3) Goldman sells shorts (on its own behalf) 100 shares of Apple through
Turquoise/EuroCCP.
4) Since Goldman both owes 100 shares to EuroCCP and is owed 100 shares from
the EuroCCP, Goldman’s net settlement obligation is zero.
5) Goldman uses euros to buy dollars and the record amount of US debt the
treasury is selling.
(See *****Net Settlement And The Shortfalls Of Clearinghouse
Guarantees***** for more info)
The EuroCCP’s introduction of clearing service for US equity on April
23 was obviously incredibly short-term bearish US equities and the euro.
Dollar Soars after EuroCCP introduces clearing service for
US equity issues on April 23
...while the Euro plunges
Dow crashes over the exact
same time period
Schaeffers Research reports that DJIA Plunges 9
Percent to Test 10,000 in Massive Market Sell-Off.
DJIA Plunges 9 Percent to Test 10,000 in Massive Market Sell-Off
Dow, SPX bounce back in late afternoon trading
by Joseph Hargett (jhargett@sir-inc.com) 5/6/2010 3:10 PM
While the major market indexes have since recovered slightly, the Dow
Jones Industrial Average (DJIA) plunged more than 9%, and the S&P
500 Index (SPX) and the Nasdaq Composite (COMP) both plummeted more than 6% in
intraday trading. What's more, the SPX even briefly dropped below
its 200-day moving average, a long-term trendline that was widely considered
a bull/bear market demarcation back in March 2009. ...
While the phrase may now be a cliché, European
sovereign debt is being blamed for the massive selloff [Bullshit. Greece was
bailed out for now. Naked short selling of US equities to European investors
is responcible.]. With Greek citizens rioting in the streets and a critical
election in the U.K., the optimism that has spawned from the Greek bailout
package has completely evaporated. What's more, there is a growing concern
regarding a potential domino effect in the euro zone. Most notably, the
Street worried that other profligate countries could follow Greece's lead,
with Spain and Portugal topping the list. [The collapse of Greece, Spain, and
Portugal BEFORE the US makes no sense. The US is the most insolvent by FAR.]
Conclusion: European
Regulators are allowing the DTC (through the EuroCCP) to intergrate into
European trade settlement. This is allowing insolvent institution like
goldman Sach to naked short sell securities to unsuspecting European
investors and place the proceeds into the dollar and US treasuries. When the
EuroCCP's net settlement frand comes to an end, European European investos
will find out they don't own gold mining shares or brazillian, but worthless
IOUs from Goldman Sach.
European Regulators are either corrupt or complete idiots to put the
retirement savings of European investors at risk this way. As I wrote in
my entry about Europe becoming of a focus of DTCC's "business activities", there is no sane justification for the DTC's
EuroCCP expanding role in European trade settlement.
Allowing EuroCCP to gain a dominant role in settling
European trades IS IDIOTIC
Doing so puts the retirement savings of European investors into the hands of
the completely-bankrupt, cash-starved US government. Given the DISASTROUS
track record of US regulators and financial institutions, there is no sane
justification for the DTC’s EuroCCP expanding role in European trade
settlement.
For more information on the DTCC and its “business activities”,
see:
*****Net Settlement And The Shortfalls Of Clearinghouse
Guarantees*****
Naked Short Selling The Euro
*****What You Need To Know About Wall Street*****
Great Lecture On (Naked) Short Selling
*****Wall Street Selling Imaginary Treasuries*****
*****Wall Street Addicted To Selling Non-existent Shares*****
*****WHAT IS NAKED SHORT SELLING?*****
As long as European regulators allow the US to raid the retirement
savings of European investors, the dollar rally will continue. However, the
day the European regulators crack down on the EuroCCP fraud, the dollar will
drop like a rock virtually overnight. The EuroCCP is the final fraud in the
multi-decade US financial Ponzi scheme.
Eric de Carbonnel
Market Skeptics
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