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Euroclear completes Nordic Central Securities Depository acquisition

03 November 2008  |  6806 views  |  0 Source: Euroclear

Euroclear and NCSD (Nordic Central Securities Depository) announce today that Euroclear's acquisition of NCSD and its subsidiaries, APK and VPC, the Finnish and Swedish CSDs, respectively, became effective as of 31 October 2008.

All regulatory and other approvals for NCSD to join the Euroclear group have been obtained. As a result, the benefits of further post-trade infrastructure consolidation are to be shared among more users of central securities depositories (CSDs) in Europe.

It is intended that APK will be renamed Euroclear Finland and VPC will become Euroclear Sweden. Once the platforms of these entities are integrated within the Euroclear group, it will be possible for clients of these CSDs to access the post-trade infrastructure covering all markets served by Euroclear as efficiently and as cost effectively as in their respective domestic markets. This will be accomplished by utilising a multi-jurisdictional model, whereby securities held under different legal regimes in different countries are accessible and transferable through the same infrastructure and single operational account. Furthermore, the harmonisation of processing rules will reduce the complexity of cross-border transactions and create opportunities for synergies and cost reductions in client back-office systems and operations.

The migration of the Finnish and Swedish transaction-processing activities to Euroclear's Single Platform is scheduled immediately after completion of the new platform, planned for 2011. In the interim, Market Advisory Committees will be created in each country to, for example, lead local market consultations on proposed harmonised market rules and practices, and local market functionalities that will be required for migration to the Single Platform.

As a result of platform consolidation and market-practice harmonisation, clients of the combined organisation can expect to save more than EUR 350 million per year in back-office and operational costs. This is half of the estimated EUR 700-800 million in annual savings achievable through CSD platform consolidation and market-practice harmonisation across Europe.

New management positions

Effective immediately, Kjell Arvidsson, currently Chief Executive Officer of NCSD, will become Chairman of both APK and VPC. Seppo Rantanen will continue in his current position as Chief Executive Officer of APK. Anso Thiré, currently Managing Director and head of the Global Capital Markets Division at Euroclear SA/NV in Brussels, will relocate to Stockholm and become Chief Executive Officer of VPC. Mr. Thiré will also have responsibility for the integration of both Nordic CSDs within the Euroclear group.

Pierre Francotte, Chief Executive Officer of Euroclear SA/NV, said: "Finalisation of the agreement with NCSD demonstrates continued user- and market-led momentum for infrastructure reform that will achieve a more efficient, lowcost settlement environment in Europe. We look forward to working with our NCSD colleagues to share together with the Finnish and Swedish capital markets the benefits of a common settlement infrastructure for domestic and cross-border transactions based on harmonised market practices."

Kjell Arvidsson, Chief Executive Officer of NCSD, added: "As part of the Euroclear group, we are providing a more solid foundation for highly efficient, cost-effective, post-trade services supported by deeper pools of liquidity and collateral for risk management purposes. We look forward to sharing these benefits with our clients, which will strengthen the competitive position of the Finnish and Swedish capital markets even further. Moreover, we welcome the opportunity to contribute our specialised expertise, especially in Nordic issuer and account operator services, to other parts of the Euroclear group, with the aim of delivering additional economies of scale and lower fees."

"Interaction with local market participants and users to promote this development, and support the migration project, will start immediately. We also welcome Anso Thiré's leadership in making the integration to the Euroclear group as seamless as possible while fulfilling his new role at VPC," Kjell Arvidsson continued.

The seven Euroclear group CSDs represent approximately 65% of the Eurotop 300 equity markets. When including Euroclear Bank, the international CSD, the new Euroclear group represents approximately 50% of all European domestic debt outstanding.

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