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Euroclear
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Euroclear
Euroclear, or the Euroclear Group, is a Belgium-based financial market infrastructure group that specialises in the central securities depository (CSD) segment. It traces its origins to the Euro-clear System developed in 1968 by Morgan Guaranty (a predecessor of JPMorgan Chase) in Brussels to settle trades on the then developing eurobond market. The service was rebranded Euroclear (without hyphen) in 1990.
In late 2000, the Euroclear System was transferred to a new entity, Euroclear Bank, a fully owned subsidiary of the Euroclear Group that has remained one of the world's two leading international CSDs, the other being Clearstream Banking SA in nearby Luxembourg. Other entities of the Euroclear group include major national CSDs acquired by Euroclear in the 2000s in Belgium, Finland, France, the Netherlands, Sweden, and the UK.
The name "Euroclear" is often misinterpreted as indicating a clearing activity of the Euroclear group, which is actually not the case. This confusion comes from the name originating before the widespread adoption of central counterparty clearing, in a time when securities clearing and settlement were often viewed as a single activity.
On 21 July 1967, the Belgian branch of Morgan Guaranty Trust Company launched a pilot securities settlement service for the Brussels eurobond market, the forerunner of the Euroclear System. On 2 December 1968, this was formally marketed as Euro-clear, marking the birth of the first ICSD. Kidder Peabody had been the first major trading firm to tell the market that it would only deal with firms that cleared through Euroclear. Euroclear's creation provoked a reaction in Luxembourg among firms which competed with Morgan and feared that Morgan could use their settlement data to its trading advantage. This led to the launch of a competitor, Luxembourg-based Cedel, in September 1970.
On 7 July 1972, Euro-clear Clearance System Ltd, a non-resident English company domiciled in Switzerland, was founded by shareholders including over 120 major financial institutions. On 1 December 1972, Euro-clear Clearance System Ltd purchased the Euroclear System from Morgan, which however kept operating it. In June 1983, Euroclear introduced computerized securities lending and borrowing. On 21 November 1986, Euroclear's legal construct was complemented with the creation of Euro-clear Clearance System Société Coopérative in Brussels.
On 31 December 2000, the system's operation was transferred from Morgan to the newly created Euroclear Bank. On 1 June 2001, Euroclear Clearance System, the parent entity of Euroclear Bank, changed its name to Euroclear plc.
Euroclear took a 20% stake in the capital of LCH.Clearnet, by then an Anglo-French entity responsible for the clearing of stock trades on Euronext and the London Stock Exchange.
Euroclear then engaged in a series of acquisitions of national CSDs. It acquired France's Sicovam in 2001, then the Netherlands' Necigef and the UK's CRESTCo in 2002. These local CSDs were renamed respectively as Euroclear France, Euroclear Nederland, and Euroclear UK & Ireland. On 1 January 2005, a new Belgian intermediate holding company, Euroclear SA/NV, was created as the owner of Euroclear Bank, the Euroclear national CSDs, and the shared technology and services supplied to them. In 2006 Euroclear completed the long-planned acquisition of Belgium's CIK, then in October 2008 purchased the Nordic Central Securities Depository comprising Finland's APK (Suomen Arvopaperikeskus Oy) and Sweden's VPC (Värdepapperscentralen AB), which had merged in 2004; the respective entities were renamed Euroclear Belgium, Euroclear Finland, and Euroclear Sweden. In July 2004, Euroclear also announced it would create a single technical platform known as ESES (for "Euroclear Settlement of Euronext-zone Securities"). The ESES project was implemented in 2007-2009, bringing together its three CSDs in Belgium, France and the Netherlands, all of which serve securities traded on Euronext.
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Euroclear
Euroclear, or the Euroclear Group, is a Belgium-based financial market infrastructure group that specialises in the central securities depository (CSD) segment. It traces its origins to the Euro-clear System developed in 1968 by Morgan Guaranty (a predecessor of JPMorgan Chase) in Brussels to settle trades on the then developing eurobond market. The service was rebranded Euroclear (without hyphen) in 1990.
In late 2000, the Euroclear System was transferred to a new entity, Euroclear Bank, a fully owned subsidiary of the Euroclear Group that has remained one of the world's two leading international CSDs, the other being Clearstream Banking SA in nearby Luxembourg. Other entities of the Euroclear group include major national CSDs acquired by Euroclear in the 2000s in Belgium, Finland, France, the Netherlands, Sweden, and the UK.
The name "Euroclear" is often misinterpreted as indicating a clearing activity of the Euroclear group, which is actually not the case. This confusion comes from the name originating before the widespread adoption of central counterparty clearing, in a time when securities clearing and settlement were often viewed as a single activity.
On 21 July 1967, the Belgian branch of Morgan Guaranty Trust Company launched a pilot securities settlement service for the Brussels eurobond market, the forerunner of the Euroclear System. On 2 December 1968, this was formally marketed as Euro-clear, marking the birth of the first ICSD. Kidder Peabody had been the first major trading firm to tell the market that it would only deal with firms that cleared through Euroclear. Euroclear's creation provoked a reaction in Luxembourg among firms which competed with Morgan and feared that Morgan could use their settlement data to its trading advantage. This led to the launch of a competitor, Luxembourg-based Cedel, in September 1970.
On 7 July 1972, Euro-clear Clearance System Ltd, a non-resident English company domiciled in Switzerland, was founded by shareholders including over 120 major financial institutions. On 1 December 1972, Euro-clear Clearance System Ltd purchased the Euroclear System from Morgan, which however kept operating it. In June 1983, Euroclear introduced computerized securities lending and borrowing. On 21 November 1986, Euroclear's legal construct was complemented with the creation of Euro-clear Clearance System Société Coopérative in Brussels.
On 31 December 2000, the system's operation was transferred from Morgan to the newly created Euroclear Bank. On 1 June 2001, Euroclear Clearance System, the parent entity of Euroclear Bank, changed its name to Euroclear plc.
Euroclear took a 20% stake in the capital of LCH.Clearnet, by then an Anglo-French entity responsible for the clearing of stock trades on Euronext and the London Stock Exchange.
Euroclear then engaged in a series of acquisitions of national CSDs. It acquired France's Sicovam in 2001, then the Netherlands' Necigef and the UK's CRESTCo in 2002. These local CSDs were renamed respectively as Euroclear France, Euroclear Nederland, and Euroclear UK & Ireland. On 1 January 2005, a new Belgian intermediate holding company, Euroclear SA/NV, was created as the owner of Euroclear Bank, the Euroclear national CSDs, and the shared technology and services supplied to them. In 2006 Euroclear completed the long-planned acquisition of Belgium's CIK, then in October 2008 purchased the Nordic Central Securities Depository comprising Finland's APK (Suomen Arvopaperikeskus Oy) and Sweden's VPC (Värdepapperscentralen AB), which had merged in 2004; the respective entities were renamed Euroclear Belgium, Euroclear Finland, and Euroclear Sweden. In July 2004, Euroclear also announced it would create a single technical platform known as ESES (for "Euroclear Settlement of Euronext-zone Securities"). The ESES project was implemented in 2007-2009, bringing together its three CSDs in Belgium, France and the Netherlands, all of which serve securities traded on Euronext.
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