Cboe Europe Equities Clearing and Settlement

Cboe Europe Equities (Cboe) offers a user-driven post trade model for a more efficient European capital market. Trading Participants benefit from pre and post-trade anonymity, real-time risk management, netting and fungibility at the domestic Central Securities Depository (CSD).

Trading Participants are able to manage counterparty risk and cost by using a Central Counterparty (CCP) as buyer to every seller and seller to every buyer.

Since launch, all trades on Cboe have been novated and guaranteed by European Multilateral Clearing Facility N.V (now European Central Counterparty NV (ECCP NV)) and settled at the domestic CSD. Since January 2012, Cboe has enabled Participants to choose a CCP per market segment by also offering a process known as interoperable clearing. This allows Participants to choose from three CCPs to clear their trades:

• EuroCCP NV
• LCH Ltd
• SIX x-clear AG

Since January 2022, Cboe has further expanded its post-trade model to enable Participants on Cboe NL (DXE) to choose LCH SA as their CCP via preferred clearing. This allows Participants to use LCH SA provided that both counterparties to a trade have selected it as their preferred CCP. If only one counterparty does so, the trade defaults to the interoperable CCP chosen by each Participant.

Post Trade Model

• Every Trading Participant requires a Clearing Participant (GCM equivalent) to guarantee trades / credit risk.
• Every Clearing Participant is required to execute a Clearing Service Agreement with a CCP per market.
• Every Clearing Participant requires a Settlement Agent at the domestic CSD.
• The Cboe market model is designed so that Participants can trade, clear and settle European stocks with minimum disruption and full fungibility in the domestic CSD.