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Euronext Launches New Collateral and Liquidity Risk Management Service

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Euronext Launches New Collateral and Liquidity Risk Management Service

  • Bringing together Collateral Transformation, Risk analytics and Inventory Management for all asset classes
  • Providing direct access to financing markets and collateral upgrade opportunities for all market participants
  • Reducing costs and introducing operational efficiencies
  • Silo warrants on wheat and rapeseed will be introduced into the Euronext contract delivery mechanism later this year

 

Regulatory News:

As part of its ‘Agility for Growth’ strategy introduced in May 2016, Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX) today announced the launch of a new post-trade solution. The Euronext Chequers service, which will be implemented in stages throughout 2017, will provide Risk Analytics, Inventory Management and a Collateral Transformation platform supporting commodities, fixed income and equities. This service meets increasing participant demands for collateral upgrade opportunities, given regulatory constraints relating to capital and margin requirements and will help customers to control costs and improve efficiency.

The initial phase of Euronext Chequers will see the start of participant on-boarding in March. This will be using electronic storage certificates, to enhance the settlement and physical delivery of Euronext’s futures contracts. Euronext Chequers electronic silo-based warrants will then be introduced later in Q2 2017, giving clear, transferable title to goods stored in silos. Developed in collaboration with industry stakeholders, the silo-based electronic warrants will meet the needs of commodities market participants, storage facilities and financing banks across Europe with the potential to expand into global markets. The warrants will enable the digital transfer of ownership of silo based commodities and will provide greater opportunities for secured financing and collateralisation.

The later phases of Chequers scheduled for Q2 2017 onwards will also see the launch of an electronic all-to-all asset financing platform supporting all asset classes pairing liquidity providers with liquidity takers. The service will provide a direct connection between inventory management and the trading platform, allowing for a seamless asset financing solution. Future phases will include the introduction of risk analytics and additional collateral management functionality.

Commenting on the launch, Lee Hodgkinson, CEO of Euronext London and Head of Markets and Global Sales, said, "This initiative is particularly well aligned with the Euronext Group’s Agility for Growth strategy, with the aim of building a broad-based offering to create more options in our post-trade franchise. We see a greater demand for high-quality collateral, and our customer-centric approach will help us to meet the needs of the financial community with efficient solutions. Euronext Chequers is also a response to increased regulation, which impacts on pricing and the availability of liquidity.”

The Euronext Chequers service will be launched and supported by a dedicated team. To this end, Euronext has recently appointed Dennis Mullany as Product Manager. Dennis has extensive capital markets experience encompassing investment banking, central clearing and exchange traded business. Dennis will report to Andrew Simpson, Head of Post Trade Services, Euronext.

About Euronext

Euronext is the leading pan-European exchange in the Eurozone with more than 1,300 listed issuers worth close to €3.3 trillion in market capitalisation as of end December 2016, an unmatched blue chip franchise consisting of 25 issuers in the EURO STOXX 50® benchmark and a strong diverse domestic and international client base.

Euronext operates regulated and transparent equity and derivatives markets. Its total product offering includes Equities, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices. Euronext also leverages its expertise in running markets by providing technology and managed services to third parties. Euronext operates regulated markets, Alternext and the Free Market; in addition it offers EnterNext, which facilitates SMEs’ access to capital markets.

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Disclaimer

This press release is for information purposes only and is not a recommendation to engage in investment activities. This press release is provided “as is” without representation or warranty of any kind. While all reasonable care has been taken to ensure the accuracy of the content, Euronext does not guarantee its accuracy or completeness. Euronext will not be held liable for any loss or damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication may be regarded as creating any right or obligation. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. All proprietary rights and interest in or connected with this publication shall vest in Euronext.

This press release speaks only as of this date. Euronext refers to Euronext N.V. and its affiliates. Information regarding trademarks and intellectual property rights of Euronext is located at www.euronext.com/terms-use.

© 2017, Euronext N.V. - All rights reserved.

 

Euronext
Pauline Bucaille (Europe): +33 1 70 48 24 41; pbucaille@euronext.com
Alice Jentink (Amsterdam): +31 20 721 4488; ajentink@euronext.com
Pascal Brabant (Brussels): +32 2 620 15 50; pbrabant@euronext.com
Sandra Machado (Lisbon): +351 210 600 614; smachado@euronext.com
Aïchata Tandjigora (Paris): +33 1 70 48 24 43; atandjigora@euronext.com