Two European share clearers complete merger

LONDON, Dec 6 (Reuters) - Two clearing houses have completed a merger creating Europe's largest cash equities counterparty, the companies said on Friday.

EMCF and EuroCCP said the deal, announced in March, would bring greater efficiency to European share clearing, offering cost savings, reduced collateral obligations and cheaper connectivity fees.

It will also create economies of scale, something considered increasingly important for market participants in the face of tougher regulation and thin volumes as the uncertain economic environment dampens trading.

A central counterparty or clearing houses stands between the two sides of a trade, backed by a default fund to complete the trade if one side of the deal goes bust.

The new entity, set to take the EuroCCP name, will compete with rivals such as Eurex Clearing, part of Deutsche Boerse (Xetra: 63DA.DE - news) , and LCH.Clearnet, in which the London Stock Exchange (Other OTC: LDNXF - news) has a majority stake.

The combined group will have a market share of around 35 percent in clearing on exchange trades, according to calculations based on Federation of European Securities Exchanges industry figures at the time the deal was announced.

Jan Booij, currently head of EMCF, will become chief operating officer when it launches officially on Jan. 6.

Regulators from the Netherlands, where the group will be based, and the UK signed off on the tie-up. The financial terms and structure of the transaction were not disclosed.

The new clearing house will have four equal shareholders, the current owners of Amsterdam-based EMCF - ABN AMRO Clearing Bank and Nasdaq OMX - and EuroCCP's owners, the U.S. Depository Trust & Clearing Corporation and BATS Chi-X Europe.