Eurex lures euro clearing volumes to Europe post-Brexit with new buy-side incentive scheme

The clearinghouse confirmed the move was to reduce reliance on CCPs outside of the EU in line with regulatory objectives.

Eurex has launched a new incentive program aimed at encouraging more euro clearing volumes to the European Union post-Brexit.

Designed for clients running active accounts in the EU, the scheme could qualify participants for an incentive reward of up to 50,000 euros when starting the clearing of OTC interest rate swaps (IRS), overnight index swaps (OIS), basis swaps and/or zero-coupon inflation swaps (ZCIS) at Eurex Clearing next year. Eligible clients may register for the incentive program until 31 March.

UK CCPs ICE Clear Europe, LCH and LME were given an extended equivalence until 30 June 2025 earlier this year in March following concerns from the industry that a cliff edge deadline of non-equivalence following the UK’s departure from the EU could pose systematic risk to the financial ecosystem in continental Europe.

Following this extension decision, the European Commission has continued to reiterate financial stability concerns and has subsequently renewed its call for participants to use this period to reduce their reliance on CCPs outside of the EU.

“With this targeted incentive program for buy-side clients, we again demonstrate our strong commitment for a market-led solution which is designed to further accelerate the development of a liquid, EU-based alternative for the clearing of OTC interest rate swaps,” said Matthias Graulich, member of the Eurex Clearing executive board.

“Especially against the backdrop of enduring uncertainty, changing rates and an increased need for hedging a broader marketplace through greater choice, improved price transparency, as well as reduced concentration risk is more important than ever.”

The move follows news that Euronext would be migrating its clearing operations from LCH over to Euronext Clearing as Europe takes an increasingly internalised approach to regulation and market structure following Brexit.

Euronext moved to break off its 10-year deal – originally due to expire in 2027 – with LCH SA in November after announcing its plans to move its clearing operations to Italy. The move followed its acquisition of Borsa Italiana and the bourse’s clearing house CC&G – now rebranded to Euronext Clearing.