[ T H O U G H T L E A D E R S H I P | C B O E E U R O P E ] ry , technology and operational development and expect to have the platform ready for network connectivity and initial customer testing in October . We ’ ve engaged vendors as well who are key in the derivatives market to make sure the connectivity is there for the first round of clients . We are in active discussions about some elements of the market design , including potential market maker protections and incentive schemes , and are holding a series of working groups with market making firms to ensure the best of the US-style market model is appropriately configured for the European marketplace . As we go through the rest of the year we will continue to conduct regular webinars with clients to showcase our plans for a more dynamic European equity derivatives market .
Clearly , getting in front of potential customers has been a little more difficult than it otherwise would have been – particularly during one of the most volatile trading periods in recent memory . That said , we have seen significant levels of interest from across the community , the feedback from the market makers in particular has been outstanding and we have
“ EuroCCP is intending to make it straightforward for both existing and new members to utilise the service and our combined model has inherent operational efficiencies .”
DAVID HOWSON , PRESIDENT , CBOE EUROPE
Cboe Europe Derivatives - Key Milestones Jul-20
Aug-20 Sep-20
Oct-20
Jan-21 First Half of 2021 * Dates subject to change and regulatory approval
• Cboe Completes EuroCCP Acquisition
• Cboe Europe Derivatives Launch Plans Announced
• Technical Specifications Available
• Network Connectivity Available and Certification and Platform Testing Begins
• Market Maker Working Groups Commence
• File for Regulatory Approvals
• Draft Rulebook , Participant Manual and Trading Manual Published
• Participant and Vendor Certification and Platform Testing Begins
• Exchange Launch with Phase 1 products
“ Our goal is to encourage deep pools of liquidity through homogenous products ; all constructed the same way . We ’ ve developed right-sized index contracts with appropriately calibrated tick sizes for index futures and options contracts .”
commitment from trading and clearing members to be there on day one . Overall , we remain on track to launch in the first half of 2021 .
You referred to efficiencies in clearing . Can you explain why the clearing layer is so fundamental to establishing a new derivatives market in Europe ? DH : Unlike equities , the vast majority of listed derivatives markets operate as vertical silos , meaning contracts trade and clear on platforms owned by the same group . While MiFID II contains so-called ‘ open access ’ provisions forcing clearing houses to connect to third party venues to promote competition at the trading level , these have been delayed until at least 2021 . It is therefore considerably easier to launch a derivatives market in Europe if you own a clearing house .
That was a major factor behind our decision to fully acquire EuroCCP , which completed in July
ADE CORDELL , PRESIDENT , CBOE NL
2020 . Increasing from a 20 % shareholder to full ownership provides us with an immediate opportunity to innovate and meet market needs in a joined-up way with a first step being able to prioritise and direct the development of clearing capabilities for derivatives . This initiative is EuroCCP ’ s first venture outside cash equities and something we are all very excited about . EuroCCP is currently working closely with its regulators on their necessary approvals , the technical build is progressing well and it will be ready to support Cboe Europe Derivatives through its early member testing in October . EuroCCP is intending to make it straightforward for both existing and new members to utilise the service and our combined model has inherent operational efficiencies by allowing users to connect to a single trading venue and clearing house for major European index exposures , versus having to connect to several domestic organisations currently .
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