European securities depositories agree to merger

European securities depositories agree to merger

Euroclear and the Amsterdam and Brussels exchanges have firmed up plans for the merger of the Belgian and Dutch central securities depositories, CIK and Necigef, into the Euroclar group. As an interim step, Euroclear Bank will take a 51% ownership interest in CIK and Necigef.

The agreement marks the first phase in the consolidation of settlement supporting the union of the ParisBourse with the Brussels and Amsterdam exchanges to create Euronext. The French CSD, Sicovam, announced its intention to merge with the Euroclear System in March of this year. A full merger agreement between the CSDs should be finalised in the first half of 2001.

The tripartite merger is designed to take place in two phases over a two-year period. Initially, DVP links will be established between CIK, Necigef, and the Euroclear System as a first step to offering pan-European settlement opportunities to the clients of BXS and AEX. Settlement of the corresponding Euronext trades, netted through Clearnet, will thus be possible in the Euroclear System, CIK, and Necigef.

In phase two, the parties plan to introduce a common, dual settlement platform for both central bank and commercial bank money settlement for CIK and Necigef clients.

Olivier Lefebvre, Chairman of BXS/CIK, comments: "This agreement means that all the components are in place for a fully integrated European trading, clearing, netting, and settlement service. The market has been demanding integration of the front and back office, and that is exactly what we are delivering here today."

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