Euronext expands clearing house to derivatives market
17 January 2023 Europe
Image: HJBC/stock.adobe.com
Pan-European stock exchange and market infrastructure Euronext has confirmed the expansion of Euronext Clearing to Euronext derivatives markets.
The expansion of Euronext Clearing will allow Euronext to manage the entire trading value chain of its markets by the end of next year.
As part of this effort, the organisation will migrate the listed financial derivatives and commodities markets of Euronext Amsterdam, Euronext Brussels, Euronext Lisbon, Oslo Børs and Euronext Paris from LCH SA to Euronext Clearing by Q3 2024.
As Euronext Clearing undertakes derivatives clearing services in Europe, Euronext has decided to terminate the existing agreement with LCH SA and will pay a termination fee of approximately €36.0 million to LCH SA.
Euronext will directly operate clearing activities for its cash, listed derivatives and commodities markets as part of its strategy to deliver a harmonised clearing framework across Euronext venues.
This will provide a single platform for clients to access information on collateral, risk and clearing. In addition, by extending its CCP coverage, Euronext aims to “significantly increase” its footprint in the post-trade space and align strategic priorities between trading and clearing.
Euronext expects Euronext Clearing to become the Euronext CCP of choice for its cash equity markets by the end of Q4 2023. Euronext says it will continue to offer an open access CCP model for cash equity clearing.
The firm reveals that the newly formed CCP aims to bring margin efficiencies to clients with the implementation of a new value-at-risk methodology, offering the financial ecosystem with solutions for risk capture and allocation within the system.
This will allow efficiencies across all asset classes, with transparency on data, particularly on settlement, leveraging Euronext Securities to access the Target-2-Securities (T2S) settlement platform, says Euronext.
Commenting on the announcement, CEO and chairman of the managing board of Euronext Stéphane Boujnah says: “Combined with the successful migration of the Core Data Centre to Bergamo in June 2022 and the planned migration of the Borsa Italiana capital markets to Optiq in 2023, the expansion of our clearing activities is a major step towards the delivery our ‘Growth for Impact 2024’ strategic plan.
“This will significantly contribute to the €100 million 2024 targeted run-rate annual synergies related to the Borsa Italiana Group acquisition.”
He continues: “Euronext has profoundly transformed itself over the past five years and is uniquely positioned to become the leading European market infrastructure. Euronext is now the leading listing venue and the largest liquidity pool in Europe, thanks to its single trading platform. We look forward to completing these strategic milestones in the coming months.”
The expansion of Euronext Clearing will allow Euronext to manage the entire trading value chain of its markets by the end of next year.
As part of this effort, the organisation will migrate the listed financial derivatives and commodities markets of Euronext Amsterdam, Euronext Brussels, Euronext Lisbon, Oslo Børs and Euronext Paris from LCH SA to Euronext Clearing by Q3 2024.
As Euronext Clearing undertakes derivatives clearing services in Europe, Euronext has decided to terminate the existing agreement with LCH SA and will pay a termination fee of approximately €36.0 million to LCH SA.
Euronext will directly operate clearing activities for its cash, listed derivatives and commodities markets as part of its strategy to deliver a harmonised clearing framework across Euronext venues.
This will provide a single platform for clients to access information on collateral, risk and clearing. In addition, by extending its CCP coverage, Euronext aims to “significantly increase” its footprint in the post-trade space and align strategic priorities between trading and clearing.
Euronext expects Euronext Clearing to become the Euronext CCP of choice for its cash equity markets by the end of Q4 2023. Euronext says it will continue to offer an open access CCP model for cash equity clearing.
The firm reveals that the newly formed CCP aims to bring margin efficiencies to clients with the implementation of a new value-at-risk methodology, offering the financial ecosystem with solutions for risk capture and allocation within the system.
This will allow efficiencies across all asset classes, with transparency on data, particularly on settlement, leveraging Euronext Securities to access the Target-2-Securities (T2S) settlement platform, says Euronext.
Commenting on the announcement, CEO and chairman of the managing board of Euronext Stéphane Boujnah says: “Combined with the successful migration of the Core Data Centre to Bergamo in June 2022 and the planned migration of the Borsa Italiana capital markets to Optiq in 2023, the expansion of our clearing activities is a major step towards the delivery our ‘Growth for Impact 2024’ strategic plan.
“This will significantly contribute to the €100 million 2024 targeted run-rate annual synergies related to the Borsa Italiana Group acquisition.”
He continues: “Euronext has profoundly transformed itself over the past five years and is uniquely positioned to become the leading European market infrastructure. Euronext is now the leading listing venue and the largest liquidity pool in Europe, thanks to its single trading platform. We look forward to completing these strategic milestones in the coming months.”
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