LONDON, April 3 Pan-European bourse Euronext
said it will use a Dutch unit of the Intercontinental
Exchange to process its derivatives transactions after
the purchase of its current clearing house collapsed.
Clearing ensures a transaction is completed even if one side
of the trade goes bust. A wider range of derivatives
transactions will have to be cleared to improve market safety
Euronext, which operates exchanges in Paris, Amsterdam,
Lisbon and Brussels, currently uses LCH SA, the Paris-based
clearing unit of the London Stock Exchange Group, which
it wanted to buy for 510 million euros ($544 million).
After the LSE's planned merger with Deutsche Boerse
was vetoed by European Union competition officials
last week, the LSE cancelled the clearing unit sale.
With Euronext's contract with LCH expiring at the end of
2018, the bourse operator had to find an alternative quickly,
and on Monday said it was signing a 10-year deal with ICE Clear
Netherlands to clear its derivatives and commodities contracts
from the second half of next year.
Euronext will invest 10 million euros in ICE Clear, and said
headline clearing fees would be cut by 15 percent.
"Overall, this represents a long term, open access,
sustainable and innovative euro zone based clearing proposition
for Euronext and its customers," the Paris headquartered bourse
said in a statement.
Euronext had already begun offering customers the ability to
clear their stock trades on EuroCCP, in which the exchange
bought a 20 percent stake, as an alternative to LCH.
Euronext accounts for about half of LCH's French business.
Shares in LSE were slightly down in early trading.
($1 = 0.9374 euros)
(Reporting by Huw Jones; editing by Susan Thomas)