Euronext, the operator of four European stock exchanges, continues its expansion into the clearing services space after announcing today that it has signed a definitive agreement to acquire a 20% stake in EuroCCP.
Earlier in May, Finance Magnates reported that the exchange group, which operates stock markets in Belgium, France, Netherlands and Portugal, has entered into exclusive talks to acquire a sizable stake in the cash equities clearer for a sum of $15.9 million (€14.0 million).
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Current owners of EuroCCP, a leading CCP for pan-European equity markets, include ABN Amro Clearing, Bats Europe, DTCC and Nasdaq. Each will own a fifth of the business when Euronext joins.
Pending the regulatory approval, the deal, which is expected to close towards the end of year, will enable Euronext to introduce EuroCCP as a choice in clearing for its equity markets. This entails a preferred CCP model where a trading participant can designate EuroCCP as its preferred Central Counterparty (CCP). In practice, if two trading members agree to clear their trade through EuroCCP, the trade will be directed to it.
Furthermore, to allow clients greater operational efficiency, this model will be followed by a fully interoperable service and will be open to other CCPs in due course.