European stock market operator Euronext is buying a 20% stake in equities clearing house EuroCCP.

Both firms have agreed in principle to the €14m ($15.9m) purchase, with Euronext citing operational efficiency and reduced post-trade costs as benefits.

Led by Diana Chan, EuroCCP clears equities from 18 European markets. It bears most of the credit risk in a trade by standing between both the buyer and seller.

Current owners include ABN Amro Clearing, Bats Europe, DTCC and Nasdaq. Each will own a fifth of the business when Euronext joins.

The clearing house, Europe's largest when it comes to cash equities, saw its profits jump by 26% in 2015.

An agreement to clear for the London Stock Exchange's main equity market boosted EuroCCP's figures. 

Following its purchase, Euronext plans to launch a preferred clearing service, providing trading participants with the choice of CCP.

“Our investment in EuroCCP and the implementation of a preferred CCP model will ensure the long-term delivery of clearing choice for our equity clients,” said Stéphane Boujnah, chairman and chief executive of Euronext.

“It further reduces the frictional costs of trading on our equity markets," he added.

Boujnah took charge of Euronext at the end of last year after Dominique Cerutti stood down in May.

Last year the firm received a favorable ruling in a Dutch court over capital requirements, opening the door to mergers and acquisitions.

It claimed previous requirements had prevented it from carrying out acquisitions and created an unequal playing field as they did not apply to other European exchanges.

The group, which operates stock markets in Belgium, France, the Netherlands and Portugal, detached from New York Stock Exchange owner ICE in 2014.