Update from our EU CEO
Robbert Booij about volatile markets and increased interest rates.
The geopolitical unrest and concerns around several financial institutions across the globe triggered volatile markets during the year and this resulted in high trade volumes and higher fee income. The additional increase in interest rates supported the region to outperform against its objectives for interest income whilst keeping costs under control.
2023 in perspective
AACB implemented enhancements to its processing systems to enable clients to increase its activity in European energy spot markets.
The continued investments in an Interest Rate Swap (IRS) Clearing offering allowed us to support Pension Scheme Arrangements (PSA’s) which became subject to the mandatory clearing obligation since June 2023. Additional products are being developed by AACB tosupport financial institutions in meeting their liquidity requirements when moving to centrally cleared products.
The major ransomware incident of a global IT vendor emphasized the necessity to invest in cyber resilience. Employees in the region managed to avoid significant impact to services and meet the requirements by switching to alternative ways of processing.
AACB’s Brazil offering was expanded with the go-live of the newly established Broker Dealer, which is a next step to support clients to connect to the Brazilian capital market.
The go-live of Euronext Clearing for cash equities represented a significant migration for the industry, our clients and us. Additional preparatory work is being done to ensure readiness for the derivatives migration in 2024.
AACB’s application for a UK Third Country Branch was approved by the UK Financial Conduct Authority in October following completion of the regulatory due diligence process.
In line with industry developments, AACB delivered enhancements to its European Market Abuse and AML trade surveillance processes.
Europe operates a large amount of exchange and CCP connections. During the year the operational resilience was improved by completing the upgrade of several tradeconnectors.
Industry cooperation also resulted in the ability to pay late margin calls of a European CCP in Euros, which is important to increase the attractiveness of European capital markets.