Deutsche Boerse changes euro clearing rules in bid to attract UK biz

Eurex Clearing, which is part of Deutsche Boerse Group, has announced the launch of a new partnership programme, in a bid to capitalise on a potential move of the euro derivatives clearing market away from London ahead of the British exit from the EU.

The initiative offers the ten most active programme participants a share in the economics of the multi-currency interest rate swap offering of Eurex Clearing on a permanent basis.

The respective participants will also be included in the governance and committee structure of Eurex Clearing AG, with participation being open to all clearing members and registered clients of Eurex Clearing.

While Eurex Clearing has not directly cited Brexit as a motive, it stresses the need for an “EU based alternative for the clearing of interest rate swaps.”

Immediate effect

The programme is open for registration with immediate effect, according to Deutsche Boerse Group, Bank of America Merrill Lynch, Citigroup, Commerzbank, Deutsche Bank, J.P. Morgan and Morgan Stanley are among the clients who already registered their early interest to participate in the Eurex Clearing partnership programme.

Eurex Clearing cleared around €180m transactions per month in 2017, with the notional cleared in interest rate swaps at Eurex  Clearing crossing €2 trn in July 2017.

Its main competitor in Europe is London-based LCH Clearnet, which is majority-owned by the London Stock Exchange. As of October 2017, LCH’s daily notional outstanding amounts to more than US$2.9trn (€2.49trn).

LCH figures to date suggest that it has not yet been affected by the British referendum to leave the EU, with the both trading volumes and the number of monthly trades registered having increased since June 2016.

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