Euronext today announces the successful achievement of Euronext Clearing’s first major strategic milestone, the expansion of its clearing offering for the Euronext Cash Markets.
Following the expansion of clearing activities on the Euronext Brussels cash markets on November 6, 2023, Euronext successfully extended the clearing offer, on schedule, to the cash markets in France, Ireland, the Netherlands and Portugal on November 27, 2023.
Since that date, pan-European clearing house Euronext Clearing now clears equities, ETFs, structured products, options and bonds on six Euronext markets.
On average, Euronext Clearing clears approximately 2 million trades on a daily basis for its 52 European and local clearing members, of which 37 have joined as part of the expansion, including all major industry clearing members.
This successful transition establishes Euronext Clearing as the Central Counterparty (CCP) of choice for Euronext’s cash markets, which process approximately 25% of European cash transactions. This transformation contributes significantly to building the backbone of the Capital Markets Union in Europe, reducing the fragmentation of European capital markets.
This important step paves the way for the expansion of Euronext’s clearing activities to Euronext’s listed exchanges and commodity derivatives in the 3rd quarter of 2024. The addition of material post-trade capabilities places Euronext at the forefront of the financial landscape, with a unique and substantial presence across the entire value chain, ideally positioned to capture future growth opportunities.
Through its expanded pan-European multi-asset central counterparty, Euronext will perform direct clearing activities for cash, listed derivatives and commodity markets by the end of 2024, providing a single platform for clients to manage their collateral and access information on collateral. risk and liquidation. Euronext Clearing innovates by adopting a new VaR-based margin methodology in line with evolving market standards. The new methodology enhances the efficiency and reliability of the capture and allocation of risks within the financial system.
The introduction of a single equity and derivatives default fund facilitates cross-margining, enabling clients to optimize their trades across seven Euronext markets. The implementation of harmonized clearing allows market participants to streamline their entire trading life cycle within Euronext and leverage the leverage of Euronext Securities to access T2S.
Since the acquisition of Borsa Italiana in April 2021, Euronext has demonstrated unique expertise in delivering major technology projects with the transition of its Core Data Center from Basildon in the UK to Bergamo in Italy, as well as the successful transition of Italian equity funds. Trade ETFs, fixed income, warrants and certificates on the state-of-the-art proprietary Euronext Optiq® trading platform.
The expansion of Euronext Clearing in the Euronext cash markets contributes significantly to the achievement of the €70 million of annual EBITDA synergies targeted by the end of 2023. Euronext continues to work on the transition of Italian derivatives trading to Optiq in the 1st quarter of 2024. Euronext expansion confirmed The clearing of listed derivatives on Euronext by the third quarter of 2024 will significantly contribute to the achievement of the strategic plan “Grow for Impact 2024” of annual EBITDA synergies of €115 million by the end of 2024.
Stéphane Boujnah, CEO and Chairman of the Board of Directors of Euronext, said:
“The successful extension of the Euronext Clearing offering to the Euronext Cash Markets is an important milestone in the implementation of our Euronext ‘Growth for Impact 2024’ strategic plan and demonstrates our ability to integrate and expand the European market infrastructure in a timely and seamless manner. This move will allow us to further serve our customers across the entire transaction value chain, unlocking new opportunities to develop innovative solutions in a more agile way.
This achievement is another step towards establishing Euronext as the leading market infrastructure in Europe to provide unparalleled access to integrated European financial markets and to form the backbone of the Capital Markets Union in Europe. Thanks to the commitment of our teams and clients, we have once again demonstrated our unique ability to deliver complex projects to shape capital markets for generations to come.”
Anthony Attia, head of derivatives and post-trade at Euronext Global, said:
“Euronext’s extensive European presence places it with the necessary infrastructure to create a resilient pan-European clearing house. The efficiency and market safety of a clearing house is based on its ability to manage various asset classes and markets, and Euronext leverages the diversity of its different markets to strengthen Euronext Clearing as a truly European clearing provider. This effort involved significant investments in technology, talent and a new risk framework, with customer support to ensure its success.
We have achieved our goal of achieving critical mass, providing an entry point and optimal support for the financial community and enabling our clients to benefit from significant risk and collateral performance. Now present across the entire trading value chain, Euronext is a single entry point to European capital markets, from pre-listing to resale through T2S, and in doing so further builds integrated European capital markets.”