Euronext prepares for 2015 derivatives launch with LCH. Clearnet
Euronext is planning to launch a new service that would allow derivatives to be reported to Euronext and cleared by LCH.Clearnet. The new service will use the Tradexpress platform built by vendor Cinnober, and is due to go live in spring 2015.
Under the new service, investors will be able to tailor derivative instruments and report through a web interface, or a dedicated electronic connection, with expiration dates, strike prices, option types and settlement styles that are not available on the central order book. The intention is also to give users capital efficiencies by letting them clear flexible trades in the same clearing pool as their existing Euronext positions.
“We are very excited to be providing this solution in partnership with Cinnober and LCH.Clearnet, which responds directly to institutional client demand for us to broaden our derivatives franchise,” said Lee Hodgkinson, head of markets and global sales. “Against the backdrop of the G20 post-crisis reform programme of increased transparency and reduced systemic risk in derivative markets, we will be positioning our service to deliver clients with the capital efficiency and risk management benefits of central clearing. This initiative will allow us to boost the competitiveness of our existing and recently launched products, and will be the springboard for expansion into new derivative products and asset classes, as it directly provides us with opportunities to develop closer links to a broader section of the trading community.”
Euronext operates stock options and stock futures as well as stock indices and commodities in Amsterdam, Brussels, Lisbon and Paris, in addition to its cash equities markets. Euronext has recently become an independent exchange group after its acquisition and subsequent IPO by IntercontinentalExchange. Earlier this week, ICE sold the last shares it held in Euronext. ICE originally acquired Euronext as part of its acquisition of the former NYSE Euronext group, which was motivated mainly by ICE’s desire to obtain Liffe, the derivatives business of NYSE Euronext. Liffe has now been folded into ICE Futures Europe.
“We are pleased to be working with Euronext to widen market access to clearing,” said Christophe Hemon, chief executive at LCH. Clearnet. “Our members recognize the benefits of centrally clearing a greater proportion of their derivative trading activity through regulated platforms. The addition of this service to our clearing pool further strengthens potential for portfolio margining for both our members and clients. We look forward to continuing our work with Euronext to grow the service in line with customer demand.”