Euroclear Bank to launch service for Euronext Brussels-listed equities
05 April 2004 | 354 views | 0
Euroclear Bank will launch today a book-entry settlement service for Euronext Brussels trades. This is the second Euronext market for which exchange members will have a choice of settlement location, following the successful launch of a similar Euroclear Bank service for Euronext Paris trades in July 2002. The Euronext Brussels service will complement the domestic-trade settlement service currently offered by CIK, the Belgian central securities depository (CSD).
By consolidating their Euronext Brussels and Euronext Paris settlement activity in Euroclear Bank, clients that are not direct members of CIK or Euroclear France will be able to benefit from a reduction in settlement costs of up to 90%.
Pierre Francotte, Chief Executive Officer of Euroclear Bank, said: "This new service for Euronext Brussels trades is part of our strategy to progressively deliver centralised access for our clients to all European equity markets through their Euroclear Bank account. Similar arrangements will be extended to trades on Euronext Amsterdam and the London Stock Exchange in the coming weeks."
"We believe this new service will bring greater liquidity to the Belgian equity market, as it will make it easier and much less costly for investors without a direct account in CIK to invest in companies such as Belgacom, which recently launched the largest initial public offering by a Belgian company in many years. Within a few weeks, Euroclear Bank clients will be able to settle stock exchange trades from the Euroclear group's five key markets ? Belgium, France, Ireland, the Netherlands and the UK," continued Mr. Francotte.
This development is a significant milestone in support of Euronext's Single Order Book and LCH.Clearnet's open architecture, which aim to offer their respective clients seamless access to trading, clearing and settlement. Our mutual clients will have the opportunity to acquire meaningful efficiency gains and generate additional savings by rationalising their trade-processing supply chain.
All transactions in securities listed on Euronext Brussels, netted and guaranteed by LCH.Clearnet, will be eligible for the new Euroclear Bank stock exchange settlement service. Once Euronext Brussels trades are netted, LCH.Clearnet will transmit instructions on a straight-through basis to the settlement platform chosen by the trading counterparties or their clearing members. Book-entry, delivery-versus-payment, settlement will be offered in commercial bank money at Euroclear Bank and in central bank money at CIK.
The full range of Euroclear Bank services, including comprehensive custody and tax services, settlement-integrated lending and borrowing, and collateral management, will be made available for Euronext Brussels listed securities.