BNP Paribas SA (BNP), Barclays Capital, Dresdner Kleinwort, JPMorgan Chase & Co. (JPM:US) and Royal Bank of Scotland Group Plc (RBS) are joining Boat, a pan-European reporting service for trades that aren't made on stock exchanges.
So-called off-exchange transactions, which take place between banks, make up about 60 percent of the trades in the top 170 companies listed on the London Stock Exchange. Banks have to report their off-exchange equity deals under a new European Union law.
``By teaming up with the consortium, we will minimize costs and be able to invest more in tailored client-specific products and services,'' Guillaume Lemarchand, co-head of global execution services at BNP Paribas, said in the statement. ``Compliance with reporting requirements commands heavy investment, especially in terms of data.''
Citigroup Inc. (C:US), Goldman Sachs Group Inc. (GS:US) and seven other banks in September said they would set up Boat to report trades made outside exchanges in Europe in a bid to cut their costs. Bourses such as LSE charge banks for reporting the transactions and then compile and resell the non-exchange trading data.
The new law, called the Market in Financial Instruments Directive, forces companies to report European off-exchange equity trades from November. It gives them the choice of where to publish the trades.
Europe's three largest exchanges, Deutsche Boerse AG (DB1), NYSE Euronext (NYX:US) and LSE, have set up trade-reporting services to entice investment banks to stay with them.
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