Euronext has completed the expansion of the Euronext Clearing offering to cash markets, specifically to France, Ireland, the Netherlands, and Portugal.
Anthony Attia
The move is the next step in the business’ “Growth for Impact 2024” strategy and follows the expansion of its clearing activities to Euronext Brussels earlier this month. Euronext Clearing is now the pan-European clearing house for Euronext cash markets and with the move is set to foster a unified European financial market and ecosystem.
Speaking to The TRADE, Anthony Attia, Euronext global head of derivatives and post-trade, said: “Delivering on our milestones creates confidence with the markets and our clients and enhances our credibility.
“This migration makes us one of the leaders on cash equity clearing in Europe. The next and last key milestone for our pan-European clearing project is the migration of our derivatives markets during Q3 2024.”
Read more: Euronext continues investment in clearing business with 50 new hires
As of the 27 November, Euronext Clearing now clears: equities, ETFs, structured products, warrants, and bonds across six Euronext markets and the new development will contribute to reducing fragmentation in European capital markets.
The offering clears around two million transactions on a daily basis for its 52 European and local clearing members. Of these, 37 were onboarded as part of the expansion – which included all major clearing members of the industry.
Delving deeper into this most recent development, Attia explained: “The European landscape is fragmented on post trade, hence further consolidation is key – as Christine Lagarde called for a few days ago. That’s what Euronext has been doing across the trading value chain, aiming to be the backbone of the EU capital markets union.
The move is paving the way for the continued expansion of Euronext Clearing with financial and commodity derivatives confirmed for Q3 2024.
Through its expanded pan-European multi-asset-class CCP, Euronext will provide a single platform for clients to manage – and access information on – their collateral, risk, and clearing.
“Once the whole migration has been completed in Q3 2024, Euronext clearing will be the CCP for all Euronext cash and derivatives markets and for fixed income and repos. Euronext Clearing will become one of the largest multi asset class multi country CCPs in Europe,” Attia told The TRADE.
Euronext obtained CC&G – now Euronext Clearing – in April 2021 as part of its acquisition of Borsa Italiana from the London Stock Exchange Group (LSEG) in a move aimed at alleviating competition concerns around its $27 billion Refinitiv deal.
Stéphane Boujnah, chief executive and chair of the managing board of Euronext, said: “This move will enable us to further cater to our clients along the entire trading value chain, unlocking new opportunities to develop innovative solutions in a more agile way.”
The expansion of Euronext’s clearing offering is set to significantly contribute to reaching the €70 million run-rate annual EBITDA synergies targeted by the end of 2023. Further, the “Growth for Impact 2024” strategic plan is aiming for a €115 million run-rate annual EBITDA synergies by end of 2024.
Speaking about further plans, Attia told The TRADE: “Today we clear the Italian listed derivative products, which are mainly equity derivatives on single stock options and futures. In Q3 next year, we will complete the migration on the French, Belgium, Portuguese, Dutch and Norwegian equity derivatives as well as the French commodities futures, which is a large franchise.”
Elsewhere, Euronext has confirmed that is it continuing to work toward the migration of Italian derivatives trading to Optiq next quarter.
Read more: ION’s LIST completes client migration onto Euronext’s Optiq trading platform
Attia further asserted: “We are now present on the entire value chain, from listing, to trading, clearing and settlement. and once the derivative markets clearing activities are migrated in Q3 next year, this creates a significant potential for us to grow organically and to develop new products and new services. We are ambitious on the growth of our different markets and then beyond our markets after Q3 next year.
“It’s too early to disclose future plans [past 2024] but you can see the different opportunities that we have for MTS and fixed income, as well as the clearing for Europe securities from our cash equity trading strategy – all these are critical elements of the value chain that that we are working on.”Last year, Euronext and LCH RepoClear concurrently launched Value at Risk (VaR) methodologies across the respective debt markets they clear, enhancing the efficiency and reliability of risk capture and allocation within the financial system.