Euronext continues investment in clearing business with 50 new hires

The exchange group discusses with The TRADE how it has not ruled out an open access model in the future and has a target of 65% headcount growth of Euronext Clearing - formerly CC&G - between the end of 2021 and 2023.

Euronext is approaching the end of a two-year hiring spree for its new clearing business as it continues to invest in the division as a core pillar of its future strategy.

The exchange group set out plans at the end of 2021 to grow the Euronext Clearing’s headcount by 65% at the end of 2023, amounting to roughly 50 new hires across its risk, technology, sales and product development functions.

As part of the growth, Euronext is also increasing its footprint in London, due to some of its largest clearing clients being based there, and in Paris, due to an existing large physically delivered derivatives contract.

The exchange intends to keep its teams close to its key stakeholders. The core risk and technology functions will be in Rome and leveraged in Porto, and its sales functions in all of its locations where it has clients, but in particular in London and Paris.

“What is important is to keep these critical functions inside the EU, close to the CCP’s authorities. We don’t want them offshore or in the UK. We want to regain strategic autonomy on post-trade and clearing specifically,” Euronext’s global head of primary markets and post-trade, Anthony Attia, told The TRADE.

“We retain flexibility. The headcount depends also on future development. We have large clients in the UK and that’s not going to change. We will therefore have sales and development resources close to the relevant stakeholders. That’s a long-term investment.”

Open access

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) to alleviate competition concerns around its $27 billion Refinitiv deal.

Since the completion of the deal, Euronext has been vocal around its intention to internalise its operations including clearing in Europe. For cash equities, Euronext Clearing will be the preferred clearing house for Euronext’s markets, however for other trading services for derivatives, commodities futures and repo clearing the preferred clearing model does not currently exist and so Euronext Clearing will clear all of the flow.

However, Attia confirmed that further open access measures for other non-Euronext trading venues were not out of the question.

“Preferred CCP model is a part of open access,” Attia said. “There is strong demand for us to offer clearing services across the different trading venues and asset classes . We’ll definitely look at expanding as soon as possible to be able to clear non-Euronext trading venues as that’s what our clients want.”

Read more – Euronext continues European internalisation with Borsa Italiana migration to proprietary trading platform

In January, the exchange operator confirmed it was set to pay €36 million to LSEG’s clearing house LCH SA in exchange for the early termination of its derivatives clearing agreement. The ongoing clearing migration is expected to contribute significantly to €115 million in synergies by the end of 2024.

In April, Euronext completed the migration of Borsa Italiana’s equities and ETF businesses to its proprietary trading platform, Optiq, removing the need to pay LSEG for the use of its technology in the future.

The exchange expects listed derivatives and commodities markets across Amsterdam, Brussels, Lisbon, Oslo Børs and Paris to move to Euronext Clearing by the third quarter of 2024. Euronext Milan’s listed derivatives business is already cleared by Euronext Clearing.

Last week, Euronext appointed Roberto Pecora as chief executive officer and general manager of Euronext Clearing, effective from 3 July. He joins the firm from Société Générale Group, where he most recently served as chief executive and general manager of SGSS SpA.