European Central Counterparty (EuroCCP) will begin clearing and settling 120 of the most heavily-traded listed depositary receipts on October 16. Its central counterparty service, EuroCCP, has been extended extends to depositary receipts transactions.

EuroCCP has also extended its relationship with Citi’s global transaction services by appointing the company 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 (DTC). For these, after the initial period, the settlement location will be at either Euroclear Bank or DTC. This should limit the need for cross-border realignments and help to reduce overall processing costs.

Depositary receipts transactions cleared and settled through EuroCCP will be priced with fees starting at €0.03 a side and falling €0.002 a side. For those 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 (MTF) to offer trading in depositary receipts cleared through EuroCCP. Virtually all of these issues are priced in US dollars.

Depositary receipts are transferable securities that represent ownership of a specified number of shares in a foreign company. Listed and traded independently from the underlying equity, depositary receipts enable traders to invest directly in high-growth economies. They comprise a significant segment of the international securities markets business today.

EuroCCP is a UK-incorporated, Financial Services Authority-regulated recognised clearing house. It is the European subsidiary of The Depository Trust & Clearing Corporation and is headquartered in London.

Depository Trust & Clearing Corporation, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives.

Citi Global Transaction Services, a division of Citi’s institutional clients group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organisations. As of the second quarter of 2009, it held on average $288 billion in liability balances and $11.1 trillion in assets under custody.