Euronext is the first exchange in the world to merge the clearing houses of three countries trough a single legal entity. Clearnet is now the sole counterparty for trades on Euronext equity and derivatives markets, and offers a guarantee of final settlement.
This gives clearing members the benefits of unified market rules and harmonised admission criteria. The French, Belgian and Dutch regulators have reached an agreement to work in close cooperation to establish a homogenous legal framework for markets in the three counties, and provide for joint supervision.
Clearnet, established as a credit institution under French law, is a wholly-owned subsidiary of Euronext. It has a branch in Amsterdam and a branch in Brussels, providing easily accessible assistance to local members. Employing a staff of nearly 150, Clearnet represents pro forma revenues of over EUR 200 million in 2000. when a total of over 3 million trades were cleared each day on cash and derivatives markets in the three centres.
Clearnet further enhances the security of the markets and members using its clearing services. Its guarantee is backed by financial resources of EUR 500 million, not including the guarantee provided by its parent company. In addition to margin calls and deposits of individual members, they comprise a mutual guarantee fund, a dedicated insurance contract and a strong equity-capital base.
The creation of a single clearing house for all Euronext markets is a decisive step forward in the process of integration of the first pan-European market. It will offer added technical capacity through Clearing 21®, the only fully operational clearing system now available with the capacity to clear trades in both equities and derivatives in real time and offering the benefits of open architecture. Clearing 21® is already in operation in Paris for both derivatives and equities, and will be implemented in Amsterdam and Brussels between now and the end of the year.
"Clearnet is the first clearing house and central counterparty in Europe to guarantee cross-border trades on all equity and derivative markets". "In this, notes Clearnet CEO Patrice Renault, it meets the requirements of users seeking to enhance the efficiency of their clearing operations and reduce related costs".
In addition to clearing services for Euronext markets. Clearnet clears trades for other providers, in particular for debt securities, and repos, and plans to extend its offering to other markets attracted by the benefits of a unified central counterparty.
Now wholly-owned by Euronext, Clearnet's capital could be open to members, the other markets it serves or other settlement organisations. Euroclear already holds an option for the acquisition of 20% of Clearnet equity.
