Euroclear Bank is launching a new straight-through book-entry settlement service for London Stock Exchange (LSE) trades cleared by LCH.Clearnet.
Euroclear says the service, which goes live on 25 June, will offer choice and competition for the settlement of SETS and other LSE trades and help to reduce the cost of cross-border transactions.
Covering FTSE 350 shares, the service is expected to make access to the LSE more attractive for non-UK banks and broker-dealers, including those operating in the UK with limited local back-office functions. It puts Euroclear in direct competition with agent banks likes Citicorp and BNP Paribas, which provide similar services across European markets.
Pierre Francotte, CEO, Euroclear Bank, says: "Euroclear Bank's aim is to be the lowest cost provider of settlement and related services for cross-border equity trades, as book-entry settlement is the most effective way to reduce costs and risks.
"We believe our new service for London Stock Exchange trades will be particularly attractive to clients seeking to centralise their equity activities across European markets."
The service will complement Crestco's existing settlement service. Securities transfers and realignments with CrestcoCo will be seamless due to the link already in place between Euroclear Bank and Crest.
Euroclear says it already has procedures in place to collect UK stamp duty and to report collections to the Inland Revenue. It also offers UK stamp-duty relief for recognised intermediaries.
The company provides similar settlement services for Euronext Paris and Euronext Brussels trades.