INTERNATIONAL: Euronext and Intercontinental Exchange Sign Agreement for Derivatives Clearing

On 3 January 2017, Euronext announced that it had been granted exclusivity to acquire 100% of the share capital and voting rights of LCH.Clearnet SA , contingent on the closing of the merger between Deutsche Börse AG and LSE Group. Euronext has communicated to the management and the Board of Directors of both LSE Group and LCH Group that the transaction remains a strategic priority of Euronext and that Euronext will remain a willing buyer of Clearnet, ‎irrespective of the outcome of the merger between LSEG and DBAG, under the terms agreed.

The agreement with ICE Clear Netherlands covers the clearing of financial derivatives and commodity derivatives for a period of 10 years.. Euronext will contribute a EUR 10m upfront investment in ICE Clear Netherlands. Clearing operations will be run from Amsterdam and a new and innovative solution for asset financing, inventory management and physical delivery for commodities will be built by Euronext and operated from Paris.

The parties intend to significantly reduce explicit and implicit costs for customers, through a 15% reduction in headline clearing fees, lower treasury management fees and the delivery of strong capital efficiencies.
The formal clearing services agreement is expected to be completed during Q2 2017.

In respect of its cash equity markets, Euronext has launched a Preferred Clearing service, providing trading participants with the choice of CCP of Clearnet and EuroCCP, in which it owns a 20% equity stake. This model will be followed by a fully interoperable service and will be open to other CCPs in due course.

In order to ensure a seamless migration of Euronext derivative markets to the new clearing house during H2 2018, Euronext and ICE Clear Netherlands will immediately engage in a joint client consultation.

Click on the link above for further details.