NYSE Euronext will commence clearing its European securities and derivatives business through two new, purpose-built, clearing houses based in London and Paris in late 2012.
NYSE Euronext has informed LCH.Clearnet in London and LCH.Clearnet in Paris that its current contractual arrangements for clearing with them will terminate accordingly at that time.
The new clearing houses are part of NYSE Euronext’s strategic plan to offer clearing services in the UK and in the Eurozone. These clearing houses will complement NYSE Euronext’s diverse cash and derivatives trading business.
The clearing of NYSE Euronext’s European business will also be re-aligned along asset class lines better to meet customers’ needs, so that the new clearing house in London will clear listed interest rate, commodities and FX products and the new clearing house in Paris will clear equities and equities derivatives products.
To build its two new clearing houses, NYSE Euronext expects to invest up to $60m until the end of 2012, some of which will be capital expenditure. From 2013 onwards, NYSE Euronext estimates that it will realize: additional revenues of at least $100m annually from insourcing its Euronext markets securities and derivatives clearing business; and significant annual cost savings from insourcing those clearing services currently provided to NYSE Liffe by LCH.Clearnet.
Duncan Niederauer, CEO of NYSE Euronext, said: “This is an exciting and enterprise-transforming project that will greatly benefit our customers and further enhance the company’s presence in Europe’s two most important financial centers, London and Paris.
“After successfully commissioning our new mission-critical trading infrastructure, UTP, across all of our businesses globally, we are now committed to investing similarly in mission-critical post-trade infrastructure in Europe.”