Euroclear has created a new book-entry service for international trading counterparties on Euronext Paris, promising settlement costs in line with those charged domestically through the French central securities depository (CSD).
From 19 July 2002, all transactions in securities listed on Euronext Paris, netted and guaranteed by Clearnet, will be eligible for the new Euroclear Bank stock exchange settlement service. Once Euronext Paris trades are netted, Clearnet will transmit instructions on a straight-through basis to the settlement platform chosen by the trading counterparties or their clearing members. Book-entry DVP settlement will be offered in commercial bank money at Euroclear Bank and in central bank money at Euroclear France.
International trading counterparties that are not direct members of Euroclear France will be able to benefit from a significant reduction in settlement costs. Their trades will now be treated on the same basis as domestic transactions, making them up to ten times cheaper than before, say the companies.
The service has been piloted with Bank Degroof, an active Euronext member headquartered in Brussels.
The move represents the first step in a process that will eventually enable Euroclear clients to process all of their equity trades in a single settlement location. Similar arrangements will be extended to Euronext Amsterdam and Euronext Brussels in 2003, in line with Euroclear's commitment to offer an integrated settlement solution in support of the Euronext Single Order Book concept.
Jean-François Théodore, chairman and chief executive officer of Euronext comments: "In line with our ambition to create a united pan-European exchange with the lowest possible access costs, we are actively pursuing an integration strategy that offers our clearing members the possibility of simply and cost effectively settling their trades via a global provider. After the successful integration of cash trading for the Paris, Amsterdam and Brussels markets in 2001, and in parallel with the clearing integration planned for completion later this year, this development signals a new phase in our efforts to consolidate the settlement process."