By Huw Jones
LONDON, July 1 – Cboe Global Markets said on Wednesday it will launch derivatives trading and clearing at its new European hub in Amsterdam next year as it completes a costlier-than-expected takeover of EuroCCP clearing house.
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.
It will build on the hub to offer trading in equity futures and options based on six Cboe Europe stock indices in the first half of 2021, with plans to add more benchmarks later.
“Full ownership of a leading equities clearing house not only enhances our current European equities business, but also provides opportunities to diversify our business into trading and clearing derivatives in the region,” said Ed Tilly, chairman of Cboe Global Markets.
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-million euro ($40.3 million) takevoer, Cboe has committed to putting in place a credit facility for EuroCCP worth up to 1.5 billion euros.
The loan is needed to fix “liquidity weaknesses” identified by the European Union’s markets watchdog ESMA following a stress test of clearing houses.
Cboe reaffirmed that acquiring EuroCCP and investment in creating a Dutch derivatives market are expected to reduce earnings per share by about $0.08 to $0.10 in 2020 and 2021.
“However, the company now expects the impact to be at the higher end of the range, primarily reflecting higher than originally projected facility fees associated with EuroCCP´s new 1.5 billion euro backup line of credit,” it said.
($1 = 0.8922 euros) (Reporting by Huw Jones; editing by Emelia Sithole-Matarise)