Citi's Global Transaction Services to Serve as EuroCCP's Settlement Agent
LONDON, April 18 /Xinhua-PRNewswire/ -- The Depository Trust & Clearing
Corporation, a leading provider of clearance, settlement and information
services, announced today that its EuroCCP subsidiary has been selected to
provide a clearance and settlement solution for Turquoise. Turquoise is a
consortium of seven major financial institutions that are working to develop
a new pan-European trading platform.
EuroCCP will provide all clearing, settlement and risk management
services to Turquoise. Citi's global transaction services business will serve
as EuroCCP settlement agent. This partnership recognizes Citi's extensive
pan-European securities network and its strong links with the European
central securities depositories.
This decision follows a request for proposal (RFP) process that has been
under way for a number of months and involved a rigorous review of proposed
alternative post-trade solutions.
DTCC has a well-earned reputation for certainty and reliability, and more
than 30 years experience in clearing and settling virtually all equity and
fixed income trading in the U.S. Last year, DTCC cleared and settled more
than US$1.5 quadrillion in securities transactions. In addition, they provide
post-trade services to the OTC derivatives market on a global basis. EuroCCP
will build upon DTCC's extensive experience and technology know-how as a
central counterparty (CCP).
"We are delighted that EuroCCP has been selected to support Turquoise,"
said Donald F. Donahue, DTCC president and CEO. "We have a long history of
providing clearing and settlement solutions across the industry and a strong
track record of helping customers lower transaction costs, reduce risk and
improve efficiency. Over the coming months, we will be working very closely
with Turquoise and we're confident that we can deliver this highly scalable,
central counterparty platform within the timeframes required."
"DTCC is well-known in the global financial services market, and they
presented a well-thought out proposal to the consortium," said a Turquoise
spokesperson. "The face of financial services is becoming much more global in
nature, and as old barriers break down in Europe under MiFID and other
directives, the landscape is becoming much more competitive. We believe
EuroCCP and Citi's global transaction services business will help Turquoise
to succeed as a new, low-cost, pan-European platform that can build the
necessary liquidity to make it a major contender against existing trading
venues."
"We are very pleased to partner with EuroCCP as settlement agent for
Turquoise," said Clive Triance, Chief Operating Officer for Securities and
Fund Services, Europe, Middle East, and Africa at Citi. "Citi has settlement
capabilities in over 80 markets globally, including all the European markets
covered by Turquoise. Our established relationships with the European central
securities depositories will ensure local settlement efficiency. We look
forward to working with EuroCCP in supporting this exciting new trading
venue."
How the new platform will work
EuroCCP will accept trades from the Turquoise trading platform and these
trades will then be netted on trade date. EuroCCP will guarantee trades upon
receipt and validation. For all trading members of Turquoise that are not
clearing members of EuroCCP, these trades will be handled through general
clearing member relationships.
EuroCCP will apply risk-based margining, with appropriate levels of
margin collected on a daily basis. Any unsettled obligations will be
marked-to-market each day.
Citi's global transaction services business will process EuroCCP's
settlement instructions for delivering and receiving securities and related
payments in various currencies through its local securities network.
EuroCCP will be a UK Recognised Clearing House (RCH), headquartered in
London. DTCC is in the process of filing an application with the Financial
Services Authority (FSA) to receive such recognition in time for the
Turquoise launch date. EuroCCP will be operated on an "at-cost" basis, and
any excess revenues collected beyond the cost to support the operation will
be refunded to participant members.
The seven investment banks behind Turquoise are Credit Suisse, Deutsche
Bank, Goldman Sachs, Morgan Stanley, Merrill Lynch, Citi and UBS, who
together generate around half of Europe's equity order traffic.
About DTCC
The Depository Trust & Clearing Corporation (DTCC), through its
subsidiaries, provides clearance, settlement and information services for
equities, corporate and municipal bonds, government and mortgage-backed
securities and over-the-counter derivatives. In addition, DTCC is a leading
processor of mutual funds and insurance transactions, linking funds and
carriers with their distribution networks. DTCC's depository provides custody
and asset servicing for 2.8 million securities issues from the United States
and 100 other countries and territories, valued at $36 trillion. Last year,
DTCC settled more than US$1.5 quadrillion in securities transactions. DTCC
Has operating facilities in multiple locations in the United States and
overseas. For more information on DTCC, visit http://www.dtcc.com .
About Citi
Citi, the leading global financial services company, has some 200 million
customer accounts and does business in more than 100 countries, providing
consumers, corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and credit,
corporate and investment banking, securities brokerage and wealth management.
Citi's major brand names include: Citibank, CitiFinancial, Primerica, Citi
Smith Barney and Banamex. Additional information may be found at
http://www.citigroup.com or http://www.citi.com .
