December 11, 2014 / 11:57 AM / 4 years ago

Euronext to launch derivatives clearing service next spring

LONDON, Dec 11 (Reuters) - Pan-European exchange Euronext is to launch a service to allow market participants to report and clear bilateral derivatives trades, it said on Thursday, as it seeks to grab a bigger share of the derivatives market.

The new service, which will launch in the spring of 2015 starting with equity derivatives, will allow deals negotiated privately between parties to be reported to Euronext and cleared through LCH.Clearnet’s French arm.

Currently most bilateral deals are settled between brokers.

The service will be delivered in partnership with financial technology firm Cinnober’s TRADExpress platform.

The move coincides with regulatory efforts to push more over-the-counter derivatives like interest rate swaps onto electronic trading platforms and through central clearing to make the market more open and safer, as well as rules requiring banks to hold more capital against derivatives trades.

“We will be positioning our service to deliver clients with the capital efficiency and risk management benefits of central clearing,” said Lee Hodgkinson, Euronext’s head of markets and global sales.

Euronext, which operates exchanges in Paris, Amsterdam, Brussels, London and Lisbon and was spun off from parent Intercontinental Exchange in June, has made the development of its derivatives business a major priority.

It has recently expanded its rapeseed contracts and is now targeting other markets. (Reporting by Clare Hutchison; Editing by Toby Chopra)

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