European Multilateral Clearing Facility N.V. (EMCF)

The European Multilateral Clearing Facility N.V. (EMCF) is a company wholly owned by Fortis. The company was set up by Fortis in 2007 to act as a central counterparty clearing house (CCP) for Multilateral Trading Facilities (MTF) and other securities exchanges.

About EMCF

The annual European Cash-Equity trading volume has risen sharply in recent years. Post-trading service providers have been very profitable due to a lack of competition in these markets. Liberalisation of financial markets combined with technological progress and customer pressure have acted as drivers for new initiatives to enter that market.

European Multilateral Clearing Facility N.V. (“EMCF”) commenced business on the 29th of March 2007. EMCF's scope of business targets to service clearing participants doing business on Multilateral Trading Facilities and Regular Exchanges, offering post trade services on the most important European Markets. The services offered include novation, gross trade netting, settlement, margining and fails & buy-in management.

EMCF currently provides clearing services for the rapidly growing MTF Chi-X Europe Limited. Chi-X Europe Limited is a new MTF largely owned by Instinet Europe Limited that operates out of London. As of September 2008, EMCF also has been appointed by NASDAQ-OMX Europe to facilitate CCP services for their platform. Later this year it will also offer services for Bats Trading Europe.

EMCF started clearing all Chi-X trades on the offered AEX and DAX index constituents. This has progressively been extended to include FTSE100 constituents (June 2007), CAC40 constituents (September 2007) and SMI20 constituents (November 2007).

In March 2008, the Swedish market (OMX30) was introduced and the UK market was extended with the most traded 57 stocks out of the FTSE 250. In April 2008, the Finnish market (OMX H 25) was added. As of June, both Denmark (KFX 20) and Norway (OBX 25) will be added. Belgium, Italy, Austria, Ireland and Spain will be available before October 2008.

Since 6 June 2008, EMCF also acts as CCP for a number of ETF's.

An up-to-date overview of available stocks can be found in our Regulation Equities at your disposal in the right column

Our Business 

All clearing operations take place in the Netherlands including clearing of securities listed or traded in other countries. Links to other Central Counterparties (CCP's) and Central Securities Depositories (CSD's) will also be established from the Netherlands. Therefore, the Dutch supervisory bodies De Nederlandsche Bank (“DNB”) and the Autoriteit Financiële Markten (“AFM”) are the supervisory authorities for all operations of EMCF.

The EMCF systems and procedures are independent and capable of servicing stocks traded on multiple European markets. Differences in the processing of trades primarily occur at settlement, since settlement takes place through regular DVP/RVP method (Delivery/receive versus payment) at the domestic Central Securities Depository (CSD), where most European CCP's use the POA-method (power of attorney).

EMCF currently offers CCP/Clearing House services in the most important European stocks. An up-to-date overview of available stocks can be found in our Regulation Equities in the right column.

EMCF utilises a newly designed Clearing House system. EMCF uses Fortis Bank (Nederland) N.V. as its primary settlement agent processing the DVP equity settlements versus the CSD's in a number of markets. Wherever possible, EMCF will open its own accounts at local CSD's.

The EMCF Management has extensive clearing experience. EMCF further benefits from Fortis Bank Global Clearing, margining and risk management expertise. EMCF has a proven, reliable clearing solution and a quick time-to-market history. All deadlines for implementation and expansion projects have yet been met.

EMCF provides the lowest cost clearing solution available in the European market. The cost structure is simple and transparent. The entry into force of new European legislation (MiFID) in November 2007 forces order flow providers to direct their flow to the venue of best execution. EMCF established itself as a low cost post-trade services provider for platforms that want to offer best execution.

Regulatory Compliant

EMCF is an independent CCP and regulated as such by the Autoriteit Financiële Markten (AFM) and De Nederlandsche Bank (DNB).

In the United Kingdom, EMCF currently falls under the “UK overseas person exclusion regime”. EMCF has applied to become a Recognized Overseas Clearing House (“ROCH”) to strengthen its regulatory position and standards. In addition, the ROCH declaration will facilitate obtaining a CCP status with CREST and strengthen EMCF's position to establish interoperability arrangements with other CCPs. Although there is no formal legal requirement to apply for the ROCH status, the FSA recommended EMCF to apply for this status, because it would enable supervision of the post trade service that (FSA supervised) Chi-X offers.

The regulatory framework in which EMCF operates is based on:

• EMCF's status as a Central Counterparty/Clearing House providing clearing services to Clearing Members of Multilateral Trading Facilities and on EMCF 
• Being part of Fortis.

The EMCF organisation and processes are based on the Recommendations for Central Counterparties of CPSS/IOSCO.

Supervision within Fortis is organised on the basis of Fortis's legal structure and takes into account the respective competences of the supervision authorities involved. As providers of banking and insurance services, all companies (i.e. EMCF) within Fortis are subject to prudential supervision by the national supervisory bodies for banking or insurance in their domicile country. For EMCF the prudential supervision is exercised by the Netherlands regulators De Nederlandsche Bank (DNB) and Authoriteit Financiële Markten (AFM).

As a company incorporated in the Netherlands, EMCF is subject to Netherlands company law. As well as complying with national legislation and regulations, the EMCF board is committed to high standards of corporate governance.

EMCF signed the European code of conduct for Clearing and settlement and fully supports the aim of this code. 

More information

General fax number EMCF : +31 (0)20 527 4663

General e-mail address:  mcf@nl.fortis.com

General number outside regular office hours: +31 (0)6 2095 7851