The Cboe Global Markets, which has completed its acquisition of EuroCCP, a leading pan-European clearinghouse, plans to launch Cboe Europe Derivatives, a new Amsterdam-based futures and options market, in the first half of 2021, subject to regulatory approvals.
The Chicago-based group had already opened a share trading hub in the Dutch financial capital in October 2019 to avoid Brexit disrupting European share trading operations in London.
The new market will be based on six Cboe Europe Indices: the Cboe Eurozone 50, Cboe UK 100, Cboe Netherlands 25, Cboe Switzerland 20, Cboe Germany 30, and Cboe France 40 – all calculated using Cboe market data. It plans to add more benchmarks later and EuroCCP will provide clearing services for the platform.
Industry veteran Ade Cordell, who joined Cboe Europe earlier this year to oversee Cboe’s expansion into European derivatives, has been appointed President of Cboe NL, subject to regulatory approval.
EuroCCP currently clears for 37 trading platforms that represent close to 95% of all equity trades on exchanges in Europe. As part of the €36 m takeover, Cboe has committed to putting in place a credit facility for EuroCCP worth up to €1.5 bn.
This facility is an important part of several new tools and procedures designed to strengthen the firm’s liquidity risk management framework and help ensure EuroCCP continues to meet relevant liquidity requirements under the European Market Infrastructure Regulation (EMIR).
Cboe reaffirmed that acquiring EuroCCP and creating a new Dutch derivatives market are expected to reduce earnings per share by about $0.08 to $0.10 in 2020 and 2021. However, the company said it now expects the impact to be at the higher end of the range, primarily reflecting higher than originally projected facility fees associated with the EuroCCP line of credit.
David Howson, President of Cboe Europe, said: “This deal marks the beginning of the next chapter for Cboe Europe. We have listened to the needs of market participants and are designing this new market from a pan-European point-of-view, leveraging our global derivatives expertise, European equities footprint, and world-class technology to build a more efficient equity derivatives market.”
Cécile Nagel, Chief Executive Officer of EuroCCP, said: “We believe this transaction positions EuroCCP for continued success. In addition to building out our derivatives clearing services, we see many opportunities to collaborate with Cboe to expand our product offering across asset classes. With our shared values and focus on innovation and client service, together with Cboe we can do even more to advance capital markets in Europe.”