European Multilateral Clearing Facility (EMCF), the European central counterparty (CCP), has introduced an optional order based pricing model. Clearing participants of EMCF will be offered the choice between the current flat fee for each execution and a flat fee per order from June 1, 2009.

This pricing model will increase the predictability of fees and lower costs when orders result in multiple executions.

EMCF is currently charging € 0.03 per execution for UK stocks and € 0.05 for all other markets. Many orders result in multiple executions, over which the current fees are charged.

From June 1, 2009, EMCF clients will be able to opt for a fee of € 0.05 per order for UK stocks and € 0.07 per order for all other markets which EMCF services. Users will have the opportunity to choose to be charged either per execution or per order before the first day of every month.

More choice
In a separate move, Chi-X Europe, the pan-European equity multilateral trading facility (MTF), has announced a further extension of its user choice clearing model following a memorandum of understanding (MOU) signed by EMCF and LCH.Clearnet Group to interoperate in the UK and Swiss market segments.

This will allow Chi-X Europe to offer its participants user choice through three-way CCP interoperability. This is in addition to the MOU signed in February between EMCF and SIX x-clear.

Clearing participants will be able to choose a single CCP for activity relating to any given market segment for a variety of different trading venues, reducing the need to fund cross margin arrangements across different CCPs. This should lower participants' overall trading costs and enable them to manage risk more effectively.

Subject to the terms of each MOU and regulatory clearance, Chi-X Europe expects its participants should be able to clear with SIX x-clear and LCH.Clearnet by the end of the third quarter 2009.

"We believe that the choice and competition offered through this horizontally integrated CCP model will result in lower prices, better service and further innovation," commented Hirander Misra, chief operating officer of Chi-X Europe.