Euronext Launches New Collateral and Liquidity Risk Management, Chequers

Euronext Chequers service will support multiple asset classes, shoring up risk and collateral management.

Euronext, one of Europe’s largest exchanges, has unveiled a new post-trade solution, Euronext Chequers, part of a multi-tiered rollout during 2017 that will help strengthen risk analytics, inventory management, and a collateral transformation across multiple asset classes.

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The newly launched Euronext Chequers service will be supported across commodities, fixed income, and equities. It will also emphasize a number of functions for market participants, such as collateral upgrade opportunities, helping also shore up regulatory constraints and constraints due in part to capital and margin requirements.

The Euronext Chequers service will also be supported by a team that includes the recently appointed Dennis Mullany as its product manager. He will be reporting to Andrew Simpson, Head of Post Trade Services.

The Euronext Chequers service will be implemented in stages throughout 2017, with the initial phase seeing the start of participant on-boarding as early as March 2017. Participants will be utilizing electronic storage certificates in a bid to enhance the settlement and physical delivery of Euronext’s futures contracts.

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Looking to Q2 2017, Euronext Chequers will also be rolling out its electronic silo-based warrants, which will give way to an eventual electronic all-to-all asset financing platform supporting all asset classes pairing liquidity providers with liquidity takers.

Lee Hodgkinson
Lee Hodgkinson

According to Lee Hodgkinson, CEO of Euronext London and Head of Markets and Global Sales, in a statement on the launch: “This initiative is particularly well aligned with the Euronext Group’s Agility for Growth strategy, with the aim of building a broad-based offering to create more options in our post-trade franchise.”

“We see a greater demand for high-quality collateral, and our customer-centric approach will help us to meet the needs of the financial community with efficient solutions. Euronext Chequers is also a response to increased regulation, which impacts on pricing and the availability of liquidity,” he added.

New Partnership

In addition to the launch, Euronext has also struck a new strategic accord with US-based fintech group, AX Trading, helping create block trading services for equities. Per the partnership, the new platform will be based on AX Trading’s existing technology, though will be owned and operated by Euronext.

The service will cover large in-scale orders in European equities ranging from small caps to blue chips. Furthermore, market participants across Europe will be able to execute blocks in a transparent environment that helps bridge the gap between human, high-touch trading and electronic, low-touch execution. The platform is slated for launch in mid-2017, pending regulatory approval.

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