Preferred Clearing
Cboe Clear Europe is the leading pan-European CCP in Europe and champions Open Access through Preferred Clearing, introducing competitive clearing to regulated markets where full interoperability is not currently available.
Cboe Clear Europe has access to around 95 percent of European equities trading activity executed on recognised exchanges. However, only 73 percent of this trade flow is fully interoperable, with 22 percent adopting a clearing process called "User Choice", or "Preferred Clearing". Under this model, a trade is cleared by the "Preferred CCP" when both sides of the trade have selected the "Preferred CCP" as their clearing provider.
| Preferred Clearing Venues | Primary CCP | Preferred CCP |
|---|---|---|
| Euronext (AMS, PAR, BRU, LIS, MIL, DUB) | Euronext Clearing | Cboe Clear Europe |
| Deutsche Borse | Eurex | Cboe Clear Europe |
How Does Preferred Clearing Work?
For Cboe Clear Europe to clear a trade on one of these venues, the buyer and seller of the trade need to select Cboe Clear Europe as a preferred CCP at the point of onboarding.
The greater number of participants, the greater the chance of a trade being cleared by the "Preferred CCP".
In order to maintain transaction reporting, trade booking and reconciliation, the venues will report back to each trading participant which CCP has cleared the trade.
Product Features
- Includes all equities and ETFs traded on Euronext’s Amsterdam, Brussels, Dublin, Lisbon, Milan and Paris markets (Main, Access and Growth).
- Clients of Euronext will receive the CCP identifier in the SBE message FILL messages
- Clients of Euronext Milan will receive the CCP identifier in the MT202, MT204, MT205, MT203 messages
- All equities and ETFs on Xetra and the Frankfurter Wertpapierborse (FWB).
- Clients of Deutsche Börse will receive CCP identifier in the ETI Trade Notification or FIX Trade Capture Report messages
Benefits
- All trades received from Euronext markets and Deutsche Börse can be netted with trades received from alternative venues. Therefore no additional settlement costs are introduced
- Clearing Members are charged the clearing fees of the European tariff, ensuring volume is rewarded through scale
- The fees charged by Cboe Clear Europe on Preferred Clearing venues are over 75% less than the primary CCP (based on average fees charged across all members).
- Participants can benefit from two incentives depending on their ADV. All fees can be found in theRegulation Fees and Penalties document.
Please also see our Preferred Clearing FactSheet.
