NYSE Euronext renews clearing deal with LCH

NYSE Euronext has selected LCH.Clearnet to clear its continental listed derivatives until 2018.

NYSE Euronext has selected LCH.Clearnet to clear its continental listed derivatives until 2018.

The exchange operator already works with LCH.Clearnet for continental derivatives clearing and has renewed its contract.

Recently its London-based derivatives exchange, NYSE Liffe, dropped LCH.Clearnet in favour of ICE Clear Europe, the clearing house of Intercontinental Exchange (ICE). ICE has agreed to acquire NYSE Euronext and is currently awaiting regulatory approval for the takeover, which is expected to complete in November.

The deal will see LCH.Clearnet clear continental listed derivatives until December 2018 and enable customers to maintain their existing clearing connectivity and infrastructure.

NYSE Euronext said the latest contract will enable enhanced cooperation and coordination between the exchange and clearing house, allowing them to develop a faster and higher quality service.

Christophe Hérmon, chief executive of LCH.Clearnet SA, said: “Stability is important for our members in this evolving regulatory environment and we are delighted to continue clearing NYSE Euronext’s continental European derivatives business.

”Our new agreement will provide continuity, while allowing us to work more closely with NYSE Euronext to improve service for customers, and continue to offer industry leading risk management capabilities in a secure and highly regulated environment."

Neither ICE or NYSE Euronext could confirm whether the decision to continue with LCH.Clearnet was due to the up-coming spin out of Euronext. ICE has stated it will sell the continental European business of NYSE Euronext following the takeover.

A NYSE Euronext spokesperson said that ICE “supported and approved” the renewal of its partnership with LCH.Clearnet.

Though ICE is said to prefer an IPO of Euronext, which is also the preferred route of French and Dutch regulators, some private groups are also thought to be considering bids for the exchange operator.