Thursday May 12,2016,
• MOU signed to finalise the acquisition of a 20% stake in EuroCCP for €14M (including contribution to regulatory capital) subject to closing adjustments
• Euronext to create user choice for clearing of Euronext equity markets, through a preferred CCP model followed by interoperability
• This will enable reduced frictional post-trade costs and improved operational efficiencies, creating significant benefits for clients
Euronext today announced that it is in exclusive talks to acquire a 20% equity stake in EuroCCP for €14M (including contribution to regulatory capital) subject to closing adjustments and regulatory approval. In addition, Euronext will offer choice in clearing within the Eurozone through the implementation of a preferred Central Counterparty (CCP) model for its equity markets. EuroCCP is the leading CCP for pan-European equity markets providing clearing and settlement services and this new partnership will allow clients to benefit from significant operational and cost efficiencies.
Following completion of this transaction five shareholders will each own 20% stake in EuroCCP : Euronext, ABN Amro Clearing Bank, Bats Europe, The Depository Trust & Clearing Corporation (DTCC) and Nasdaq. Euronext is taking a major step forward to the benefit of its clients through enabling user choice, by delivering optionality in clearing and enhancing the service for equities trading in the Eurozone.
Euronext will launch a Preferred Clearing service, providing trading participants with the choice of CCP. Under this service, if participants on both sides of a trade select EuroCCP as their CCP then the executed trade will be cleared by EuroCCP, their designated CCP. This will allow clients greater operational efficiency, the potential for increased netting opportunities and the ability to reduce frictional post-trade costs in relation to Euronext equity markets. This model will be followed by a fully interoperable service and will be open to other CCPs in due course.
“Our investment in EuroCCP and the implementation of a preferred CCP model will ensure the long-term delivery of clearing choice for our diverse range of equity clients. It further reduces the frictional costs of trading on our equity markets. This is a step forward in our commitment to offer optionality to all our clients in the Eurozone and to power pan-European capital markets to finance the real economy.” said Stéphane Boujnah, Chairman and CEO of the Managing Board of Euronext NV.
“Sustaining competition in clearing has long been our goal at EuroCCP and we are delighted that Euronext joins us in this vision as a strategic investor and service partner. We look forward to working closely with them on the roll-out of their preferred clearing model”, said Jan Bart de Boer, Chairman of the Supervisory Board of EuroCCP and Chief Commercial Officer, ABN AMRO Clearing.