EuroCCP will be clearing and settlement partner of project 'Turquoise'

Five months ago seven investment banks announced their decision to create a Multi-Trading-Facility (MTF) and dubbed their project 'Turquoise'. This decision was seen as a reaction to high trading costs, the lack of competition in clearing and settlement and, lastly, to the EU's Markets in Financial Instruments Directive, MiFID, which will come into force in November 2007. Turquoise has now announced its decision to choose EuroCCP, a new subsidiary of the American Depository Trust & Clearing Corporation (DTCC), as a provider for clearing and settlement of their securities transactions. EuroCCP will be based in London and will be supervised by the respective British regulator. Furthermore, Citigroup's Global Transacton Services division will work in partnership with EuroCCP.

The Swiss SIS Group had also been considered as a possible partner, but it was not able to compete in the price bidding. However, this might not be the last word. According to sources close to the investment banks behind the Turquoise project, the partnership with EuroCCP will not have an exclusive character. In a second phase of the Turquoise project around mid-year 2008 there might be another opportunity for SIS Group.

Meanwhile, the Swiss exchange SWX is nourishing realistic hopes to become the trading platform for Turqouise via their London-based exchange virt-x. Turquoise will require a specific brokerage functionality, the so called Smart Order Routing Technology which is not wide-spread at the present moment. This technology allows to search for the best price of a security regardless of where it is actually traded. SWX is presently making efforts to be technologically compatible for this system.

Source: Neue Z├╝rcher Zeitung


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