Euronext targets expansion into collateral management space

Euronext has launched a collateral and liquidity risk management service as part of its continuing ‘agility for growth’ strategy.

The Euronext Chequers service aims to provide risk analytics, inventory management and a collateral transformation platform supporting commodities, fixed income and equities.

The service comes in response to increasing demands for collateral management tools as a result of regulatory constraints relating to capital and margin requirements.

“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,” said Lee Hodgkinson, CEO of Euronext London and head of markets and global sales.

The initial phase of the system will be implemented in March with the start of participant on-boarding involving the use of electronic storage certificates in a bid to enhance the settlement and physical delivery of Euronext’s futures contracts.

Additional phases, scheduled from Q2 2017 onwards, will include an electronic asset financing platform pairing liquidity providers with liquidity takers with the aim of delivering a direct connection between inventory management and the trading platform.

Future phases are also set to include greater risk analytics and additional collateral management functionality.

“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,” said Hodgkinson.