Repo clearing is gaining attention in Europe. What is driving this momentum?
The drivers are both structural and cyclical. Structurally, clearing brings transparency, balance sheet efficiency, and systemic safeguards. Cyclically, the withdrawal of central bank liquidity has pushed banks and investors back into private funding markets, where repo has once again become the primary secured channel.
Infrastructure has also matured. Triparty services, general collateral (GC) baskets, and wider CCP usage have made repo more scalable and accessible, while regulators are increasingly emphasising the importance of central clearing. In the US, most treasury repo will move into CCPs by 2027 under new Íø±¬³Ô¹Ï and Exchange Commission (SEC) rules, while in Europe close to half of euro-denominated repo already clears.
In the UK, the Bank of England’s September 2025 discussion paper on gilt repo resilience points to greater central clearing as a potential solution, alongside measures such as minimum haircuts on non-centrally cleared trades. This places gilt repo within the same global policy trajectory seen in the US and EU, where authorities are looking to reduce systemic risk and strengthen market functioning through clearing.
Together, these developments underline why cleared repo is firmly on the agenda.
What differentiates Euronext’s repo offering from other established providers?
Euronext is not replicating existing models, we are designing a clearing framework that reflects client requirements. There are five areas where our approach stands out:
1. Margin methodology. Our model is calibrated for transparency and predictability. It reduces unnecessary procyclicality and aligns with how firms manage risk, supporting both resilience and capital efficiency.
2. Settlement flexibility. Members can use existing central securities depository (CSD) links, with obligations netted in one place. That means liquidity, netting, and operational efficiencies without costly infrastructure changes.
3. Sponsored access. We are co-developing this with both buy and sell side participants to ensure it is scalable, practical, and genuinely reflects their needs; unlike other models that are imposed top-down.
4. GC baskets. From 2026 we will offer competitive GC baskets with offsets across correlated assets and cross-margining within a single account, creating significant efficiencies and deeper liquidity.
5. Euronext ecosystem. Integration with MTS trading venues and our fixed income derivatives platform delivers front-to-back efficiencies, underpinned by our role as a multi-asset CCP embedded in Europe’s capital markets.
Together, these factors make Euronext a credible, client-driven alternative to incumbents.
Collateral optimisation is becoming critical. How is Euronext evolving its collateral management offering?
Collateral is the foundation of cleared markets, and one of the main priorities of the Repo Expansion Initiative is enabling more effective use of it.
From launch, we broadened eligible assets beyond the Euro; accepting US dollar, pound sterling, and Norwegian Krone. This ensures members can meet obligations with a wider set of assets, reflecting real balance sheet composition. We will also broaden eligible assets to new securities in 2026.
We are also introducing a triparty agent model, with Euroclear and Clearstream already announced as partners for collateral management. These integrations will streamline settlement, reduce operational burdens, and enable real-time collateral mobility.
By embedding collateral management triparty capabilities in the CCP, we are giving participants the tools to manage collateral more efficiently and with greater flexibility. Other alliances are to follow.
GC baskets are an important innovation for Euronext. How do they fit into the Repo Expansion Initiative?
GC baskets are central to creating deeper and more standardised liquidity. Rather than financing individual securities, participants can transact against diversified pools at unified rates.
Euronext will launch competitive GC baskets in 2026, built with a leading triparty agent and designed to include risk offsets across correlated assets. Subject to regulatory approval, these baskets will also allow cross-margining across debt instruments within a single account.
This approach not only improves capital efficiency but also reduces concentration risk and supports more robust liquidity across borders. Combined with our risk model enhancements, GC baskets will make clearing materially more efficient for members.
Market participants are looking at broader collateral eligibility. What steps has Euronext taken?
We have significantly expanded the scope of eligible assets. Beyond core sovereign bonds, we already accept major non-euro currencies, and further expansion is planned.
Equally important, our Sponsored Model will allow securities to be delivered directly as margin. Cash is often the scarcest resource, and giving members the ability to deliver securities directly to the CCP reduces systemic reliance on cash collateral. This flexibility strengthens balance sheet management and makes the overall collateral ecosystem more resilient.
Capital efficiency remains a priority for the sell side. How does Euronext’s model address this?
Capital constraints are a defining challenge for dealers, and clearing must be part of the solution. Our model is built with efficiency in mind.
Multilateral netting across different debts reduces gross exposures and frees up balance sheet capacity. Our margin methodology is risk-sensitive and transparent, avoiding unnecessary procyclicality. Meanwhile, securities-as-margin reduces the reliance on cash, easing liquidity strain for the buy side under the Sponsored Model.
Aligning regulation with balance sheet realities is vital to ensure clearing helps the sell side intermediate client activity more effectively.
What are the next phases of the Repo Expansion Initiative?
Our roadmap is ambitious but phased to ensure stability and client alignment:
Q3 2025: Add French, German, Dutch, and Belgian government bonds, plus euro-denominated supranationals.
Q4 2025: Add Austrian and Finnish government bonds, completing the first expansion of sovereign coverage.
2026: Launch of GC baskets with risk offsets and cross-margining.
Q2 2026: Rollout of the sponsored access model, enabling buy side firms such as pension funds and money market funds to participate without direct membership.
Q3 2026: Completion of the Repo Expansion Initiative, with full functionality, coverage and capital benefits in place.
How should clients prepare for potential mandatory repo clearing in Europe?
There is no EU mandate today. EMIR 3.0 focuses on making EU clearing more attractive, not mandating repo. In the UK, the Bank of England is consulting on gilt repo, and, in the US, Treasury repo will move into CCPs by June 2027. These set the direction without dictating an EU outcome.
The best approach is readiness without over-commitment:
• Establish connectivity and legal terms with at least one EU CCP.
• Run low-volume pilots to test margin and funding impacts.
• Align collateral policy, including securities-for-margin and triparty connections.
• Refresh playbooks for default management, porting, and reporting.
This shortens lead-times and reduces operational risk whether or not a mandate emerges.
Finally, what is Euronext’s long-term vision for repo and collateral?
Our ambition is to become the reference CCP for European repo. By the end of 2025, we will cover the full eurozone sovereign spectrum. In 2026, we will launch GC baskets and sponsored access, broadening liquidity and participation.
Longer term, integration with Euronext’s trading and derivatives ecosystem will deliver genuine front-to-back efficiencies. Collateral innovation, from triparty services to securities-as-margin, will remain at the core of our model.
Ultimately, we are shaping the next phase of Europe’s repo clearing: a framework that is resilient, efficient and inclusive; designed not just to meet regulatory demands, but to help clients thrive in a changing market.
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