18 April 2007

DTCC's chosen as Clearance and Settlement Provider for Turquoise

The DTCC has been selected to provide a clearance and settlement solution for Turquoise, 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.

'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', said Donald Donahue, DTCC president and CEO.

'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', a Turquoise spokesperson said.

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 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.

Press release

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