EuroCCP Introduces Comparability of All-in Trading Costs
EuroCCP 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 central counterparties (CCPs).
Robert Barnes, managing director, equities, at UBS Investment Bank, said: “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 comparability, a more meaningful metric for competitive landscape cost analysis.”
EuroCCP launched the basis-point initiative after a month-long pilot phase, during which customers provided their input and recommendations.