Cboe Mulls Different Options to Acquire Clearinghouse EuroCCP

Alternative scenarios could see two stockholders exit or reduce their stakes to allow the others to increase their holdings.

Cboe Global Markets Inc. is exploring buying equities clearinghouse EuroCCP as its current owners mull adjusting their stakes, FTadvisor reported on Friday.

Current owners of EuroCCP, a leading CCP for pan-European equity markets, include Euronext, ABN Amro Clearing, Bats Europe, DTCC, and Nasdaq. If successful, Europe’s largest pan-European stock market will join five shareholders that each owns a 20 percent stake in EuroCCP.

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Cboe has held formal talks to discuss the possible options, including an outright takeover, said one of the people, who asked not to be identified because the discussions aren’t public. No decision has been made, but alternative scenarios could see two stockholders exit or reduce their stakes to allow others to increase their holdings.

Euronext, which operates stock markets in Belgium, France, Netherlands, and Portugal, was the latest to acquire a sizable stake in the cash equities clearer. In 2016, the exchange group completed the acquisition of a 20 percent stake in EuroCCP for €13.4 million.

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EuroCCP has expanded its clearing access

EuroCCP has been chosen earlier this year to provide clearing services to the recently established EU-entities of Cboe Europe, Turquoise, and Aquis Exchange. This will allow Cboe clients to continue trading and clearing activities upon the UK’s departure from the European Union.

The deal also 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.

EuroCCP has signed various trading venues to clear their trades over the past year, including Oslo Børs, Borsa Italiana and Euronext Dublin. More recently, it has teamed up with Tradeweb to facilitate central counterparty clearing for its European ETFs.

Overall, EuroCCP clears more than 95 percent of Europe’s cash equities trades executed on organized venues, but the clearinghouse supports open access through providing three-way interoperability.

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