Euronext to ditch London Stock Exchange for clearing by 2024

Pan-European exchange Euronext said on Monday it will clear all trades on its newly acquired Italian platform by 2024, helping the European Union cut its reliance on the London Stock Exchange for core financial activities after Brexit.

Currently most Euronext clearing is handled by the LSE's LCH unit in Paris, which Euronext has not been able to buy outright.

Setting out Euronext's strategic priorities to 2024, its Chief Executive Stephane Boujnah said the group, which operates seven stock markets across Europe, would build on its acquisition of the Milan exchange earlier this year.

Closer ties with LCH, which is ultimately controlled by a company now outside the EU since Brexit, was not as attractive as expanding in-house clearing, Boujnah said. "The numbers and the strategy were compelling."

Exchanges have long sought to have control over clearing to generate more income. "Euronext is in a very strange situation as the only exchange of its size which has no control over its clearing flows," Boujnah told Reuters.

Although Euronext business is only a "small part" of LCH in France, the exchange will pay a break-up fee to the LSE.

The move is likely to be welcomed by EU policymakers who are seeking to build up the bloc's capital market 'autonomy' and end reliance on the City of London since Brexit.