Cboe Global Markets buys EuroCCP clearing house

Chicago-based Cboe Global Markets said on Tuesday it would take full control of Amsterdam-based EuroCCP, Europe’s largest clearing house for stock trades.

The move will strengthen Cboe’s post-Brexit base in Amsterdam and help it diversify into derivatives.

Cboe already owns 20% of EuroCCP and is now buying four 20% stakes held by Euronext, Nasdaq, ABN Amro and The Depository Trust & Clearing Corporation (DTCC).

Cboe said its ownership of EuroCCP “is expected to provide opportunity to pursue the development of equity derivatives trading and clearing capabilities in the region” subject to regulatory approvals.

“EuroCCP currently clears trades for 39 trading venues, which represent close to 95 percent of Europe’s equity landscape, making it the most connected equity central counterparty (CCP) in the region,” said Cboe Global Markets.

“EuroCCP clears on average between four to five million trade sides daily, totalling €30 to €40 billion in value, and provides clearing members with easy access and the ability to maximize operational efficiency and netting opportunities while reducing risk and cost.

“Cboe sees an opportunity to further grow this business by capitalising on the strength of its pan-European network.”

Cboe Global Markets CEO Ed Tilly said: “Cboe’s planned acquisition of a leading equities clearing house in Europe is an important step in our growth strategy for the region.

“We believe ownership of EuroCCP will enhance our current European equities business, while providing opportunities to potentially diversify our business, including trading and clearing derivatives, in the future. “

David Howson, chief operating officer of Cboe Europe said: “As Europe’s leading pan-European equities clearing house, EuroCCP is essential to providing cost-effective clearing and trading competition in European capital markets that benefits all market participants.

“We are committed to maintaining and extending these benefits to customers throughout the region.

“We are optimistic that we can further grow the EuroCCP business by leveraging our track record of innovation and strong customer relationships to create vibrant, efficient pan-European market infrastructure.”

EuroCCP CEO Cécile Nagel said: “Cboe is a staunch advocate of open access and interoperability, values which EuroCCP has long promoted, with an established track record of servicing clients globally and providing innovative products across numerous asset classes.

“We believe this transaction positions EuroCCP for continued success and we look forward to becoming part of the Cboe group.

“EuroCCP remains committed to offering a best-in-class service with leading client satisfaction.”

PJT Partners acted as exclusive financial advisor to EuroCCP, Allen & Overy acted as exclusive legal counsel to EuroCCP and Greentarget acted as communications strategy advisor to EuroCCP on the transaction.

Cboe’s legal counsel on the transaction was Macfarlanes LLP and Norton Rose Fulbright LLP.