Amsterdam
05 April 2017
Reporter: Drew Nicol

Euronext and ICE Clear partner up


Euronext is set to partner with ICE Clear Netherlands for access to clearing services for its financial derivatives and commodities markets.

Clearing operations will be run from Amsterdam, while a new asset financing solution for inventory management and physical delivery for commodities will be built by Euronext and operated from Paris.

Euronext will contribute a €10 million upfront investment in ICE Clear Netherlands.

Both parties have promised to cut headline clearing fees, treasury management fees by 15 percent.

The agreement will begin in Q2 and run for 10 years.

Euronext will appoint one representative to the ICE Clear Netherlands risk committee and will chair a product committee dedicated to Euronext‘s clearing service.

In respect of its cash equity markets, Euronext has launched a preferred clearing service, providing trading participants with the choice of a central counterparty (CCP) of Clearnet and EuroCCP, of which it owns a 20 percent equity stake.

According to Euronext, this service will be open to other CCPs "in due course".

The new relationship acts as Euronext’s contingency plan after the recent collapse of merger talks between the London Stock Exchange and Deutsche Börse scuppered Euronext’s plans to purchase LCH.Clearnet SA.

Euronext has said its purchase of the French clearinghouse, worth €510 million, remains a “strategic priority”. It would provide a permanent clearing option for Euronext’s clients once the agreement with Clearnet expires at the end of 2018.

The European Commission prohibited the merger between Deutsche Börse and the London Stock Exchange in late March on the grounds that it would cause a “de facto monopoly”, and that the proposed measures to counter this were not enough.

Although the London Stock Exchange’s sale of LCH.Clearnet SA would have resolved concerns around single stock equity derivatives, it would not have addressed the creation of a monopoly in fixed income clearing.

As part of its initiative to access clearing options, Euronext also acquired a 20 percent stake in EuroCCP and subsequently launched the preferred clearing model for cash equities.

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