The ambitions have been known but now the dates have been announced. The Euronext group’s expansion of its derivatives clearing from today’s Euronext Milan – to also include the trades at Euronext’s marketplaces in Paris, Amsterdam, Brussels, Lisbon, and Oslo – will take place in the third quarter of 2024, about nine months after a similar shift in its cash equity markets. The existing contract with today’s clearing partner LCH SA is cut short, with the latter to receive €36m in compensation.
We have touched in a number of news posts on Euronext’s plans to take ownership of the clearing, or most of it, at its trading venues across Europe. The time plan was recently clarified in a press release. Europe’s other four large clearing actors (LCH, Eurex, Cboe Clear Europe, SIX) are all owned by competing marketplace operators.
Euronext says its ambition is “to internalise the clearing activity of its cash and derivatives flows, today operated by third-party providers”. Together with other changes, the expansion of the clearing business should “allow Euronext to manage the entire trading value chain of its markets by the end of 2024,” says the group.
“Euronext will directly operate clearing activities for its cash, listed derivatives and commodities markets, and create value through a harmonised clearing framework across Euronext venues. It will provide one single platform for clients to access information on collateral, risk, and clearing. Euronext Clearing will bring margin efficiencies to clients with the implementation of a new Value-at-Risk methodology, offering the financial ecosystem with increasingly efficient and resilient solutions for risk capture and allocation within the system,” it adds.
Euronext’s consolidation efforts also include migrating trading at Borsa Italiana to the group’s platform Optiq, and moving a core data centre from Britain’s Basildon to Italy’s Bergamo. Operationally, the clearing expansion builds on Euronext’s acquisition of Italy’s multi-asset clearinghouse CC&G, the takeover of which came into effect in April 2021.