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EuroCCP launches clearing and settlement for depositary receipts

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European Central Counterparty will begin clearing and settling 120 of the most heavily-traded listed depositary receipts on 16 October.

EuroCCP has further extended its relationship with Citi’s Global Transaction Services, by appointing the firm as EuroCCP’s settlement agent for these instruments.

Initially all transactions will settle at Euroclear Bank. Some ISINs are eligible both at Euroclear Bank and the Depository Trust Company 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.

James Cressy, head of EuroCCP Operations, says: “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 have fees starting at 3 euro cents per side and falling to one-fifth of euro cent per side. For 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 to offer trading in depositary receipts cleared through EuroCCP. Virtually all of these issues are priced in US dollars.

Tom Isaac, global head of client and sales management for financial intermediaries, Citi, says: “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.”

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