Euro-clearing battle heats up as Eurex gains ground with profit sharing scheme

Profit sharing scheme has 25 market participants signed up globally since launching in October last year.

Eurex Clearing’s profit sharing scheme has continued to win clearing business from London since its launch, as the battle for euro-clearing continues.

Average daily volume cleared in OTC interest rates surged to €35 billion in January this year from €5 billion in 2017, Eurex said.

The programme was established in consultation with major institutions and awards its 10 most active participants with a ‘significant’ profit share of the multi-currency interest rate swaps business.

Larger clients will also be included within the governance and committee structure of Eurex Clearing.

Since its launch in October last year, 25 market participants from the US, Asia, Continental Europe and the UK have signed up to use the service. 

"We observe an increasing number of banks now quoting the same spread for Eurex Clearing and LCH cleared swaps,” said Eurex Clearing CEO Erik Müller. “This provides end clients such as investment funds, insurance firms and pension funds with real choice for the first time.”

Eurex Clearing described the scheme as a performance-based programme, which “aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance”.

The scheme is a push to win euro-denominated derivatives volumes from London’s LCH, which holds the majority of banks and buy-side clearing business.

LCH also operates a profit-sharing model, which has helped it win competition from its US counterparts for the majority of swaps clearing globally.