Euroclear completes restructuring

Source: Euroclear

Following receipt of all necessary regulatory approvals and consents, the Board of Euroclear plc is pleased to confirm the completion of the Euroclear group's corporate restructuring.

In this context, Euroclear SA/NV, the new holding company of the group's national and international central securities depositories (CSDs), commenced activities with effect from 1 January 2005. The new company, incorporated in Belgium and with branch offices in Amsterdam, London and Paris, owns the group's shared securities-processing platforms and delivers a range of services to the group's depositories, including development of its technology platform.

As a result of the restructuring, Euroclear Bank has relinquished its ownership of the group's three CSDs - CRESTCo, Euroclear France and Euroclear Nederland - and instead becomes a sister company of each, all under the ownership of Euroclear SA/NV. It is further envisaged that CIK, the CSD of Belgium, will become a sister company of the other Euroclear depositories later this year, subject to final completion of the purchase agreement with Euronext NV that was announced in November 2004.

A. Chris Tupker, Chairman of Euroclear plc, stated: "This new structure minimises systemic risk by segregating the group's CSDs and their clients in the highly unlikely event of Euroclear Bank's insolvency."

In order to demonstrate that there is no cross-subsidisation of Euroclear Bank activities by the CSDs, and to reinforce transparency in respect of inter-company cost allocations, independent auditors review annually and attest publicly that Euroclear is in full compliance with OECD transfer-pricing principles relating to such allocations. The first such attestation was included in the 2003 Annual Report; Euroclear remains the only settlement-service provider furnishing independent third-party verification of this kind.

Underpinning the strong user-governed ethos of the new holding company, the Board of Euroclear SA/NV is comprised of 26 non-executive members, drawn from the main Euroclear client segments across the geographic spread of Euroclear's business.

In addition, Pierre Francotte, formerly Chief Executive Officer of Euroclear Bank, has been appointed the first CEO of Euroclear SA/NV. Ignace R. Combes becomes Deputy CEO. Mr Francotte is replaced as CEO of Euroclear Bank by Martine Dinne, previously Executive Director, Euroclear Bank.

Commenting on today's announcement, Pierre Francotte said: "The impact of this restructuring on Euroclear's clients is minimal. As Euroclear SA/NV only provides services to the other Euroclear group entities, clients will continue to access Euroclear services through Euroclear Bank, CRESTCo, Euroclear France or Euroclear Nederland, as they have always done."

In the context of the restructuring, both Standard & Poor's and Fitch Ratings have reiterated their AA+ rating of Euroclear Bank.

Additionally, as a result of the recent corporate restructuring of the Euroclear group, the Euroclear Board has confirmed a number of senior management appointments.

Pierre Francotte, Chief Executive Officer of Euroclear Bank SA/NV since its creation in 2001, has been appointed the first CEO of Euroclear SA/NV, the new holding company established as the parent of the group's national and international central securities depositories (CSDs).

Mr Francotte joined Euroclear in 1993 as head of the Legal division. He also served as head of the Transaction Processing division before being appointed Chief Operating Officer in 2000. Earlier in his career, Mr Francotte was Assistant General Counsel at the International Monetary Fund in Washington, D.C.

In a similar vein, Ignace R. Combes, Deputy CEO of Euroclear Bank, becomes Deputy CEO of Euroclear SA/NV, with specific responsibility for the group's Technology and Business Model & Harmonisation divisions. Mr Combes started his career in 1976 and has held senior positions in operations, marketing, banking and strategy in Brussels and other international locations.

Martine Dinne, meanwhile, replaces Mr Francotte as Chief Executive Officer of Euroclear Bank. Previously Executive Director of the Bank, Ms Dinne joined Euroclear in 1969 and has held a variety of positions over the years, including head of the Commercial, Operations, Strategic Research & Product Management divisions.

Following the untimely death on 7 October 2004 of Theo Van Engeland, Euroclear Bank's Chief Financial Officer, Frédéric Hannequart, currently Managing Director and head of the Financial Division, has been appointed the new CFO of Euroclear SA/NV. Mr Hannequart joined Euroclear in 1998 and previously served as head of Treasury & Collateral Services.

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