The Future of European Clearing and Settlement

The pace of change in European financial markets is enormously fast if measured against a barometer of historical change. As we all know laws and regulations as a result of political agendas is the power that is driving most of the change but there are also market forces at work, which are creating a new structure for clearing and settlement in Europe. Thinking ten years forward what will be the clearing and settlement landscape and what can we expect to be the benefits to the market players and their clients? 

In my view, in ten years’ time Europe will be dominated by two major Stock Exchanges offering post-trade services to their users in a vertical silo structure. Other Exchanges that are able to compete and there won’t be many, will become niche and use clearers in a horizontal clearing structure.

Custodians will get even bigger than they are today and provide a complete outsourced clearing and settlement service to an array of different types of financial services firm, offering services to retail investors. These firms will dominate the retail sector and be small in size but huge in influence.

The Internet will become the major contributor to a hike in globalisation and the creation of new enterprises. We will see Google and social networking sites enter the world of commerce and begin to supply the investing community with an increasing number of investment services. This will be the fuel that attracts an army of young new investors into the market, as they become disillusioned by pension funds.

What’s your view? Join us at the next post-trade forum to discuss and debate the future of European clearing and settlement on the morning of the 26th June at the London Stock Exchange.