#Brussels #Belgium #Central Securities Depository #Euroclear #Post-Trade Services

Euroclear's Ambitious Plan for a Unified Post-Trade Market

In a significant stride towards enhancing Europe's financial services landscape, Euroclear has announced a comprehensive initiative aimed at transforming the post-trade infrastructure across all 27 EU member states. This groundbreaking plan is designed to establish a true single market for post-trade services spanning across various asset classes, including equities, fixed income, and investment funds.

The Vision Behind the Initiative

Euroclear's commitment to creating a more efficient and interconnected financial market plays a pivotal role in supporting the ambitions outlined in the Savings and Investments Union (SIU). By fostering a unified approach across member states, Euroclear aims to solidify Europe as a leading destination for both investors and issuers on the global stage.

Valérie Urbain, the CEO of Euroclear, emphasized that the key to a more liquid and effective European capital market lies in promoting market openness, interconnectivity, and myriad choices for market participants. She stated, "Only under these conditions can European markets truly thrive and remain competitive at a global level. Today, we are committed to making Euroclear the single-entry point for all asset classes."

Key Benefits of the Initiative

The proposed framework is set to provide numerous advantages for the European financial market:

1. Seamless Connectivity: By providing a single point of access across all EU markets, Euroclear can enhance interconnectivity and streamline processes for market participants.
2. Deriving Competitive Edge: The initiative aims to encourage healthy competition among market players while promoting financial stability, paving the way for greater market performance.
3. Innovation Facilitation: As part of its strategy, Euroclear plans to drive the adoption of innovative technologies and processes that can further increase market efficiency.

These advancements will not only simplify operations but also support a diverse ecosystem for issuers and investors. Euroclear envisions offering a robust platform that connects them all while driving down costs associated with market participation.

Strategic Steps Toward Implementation

Central to Euroclear's action plan is the acceleration of its connections with the European Central Bank's Target2-Securities (T2S) platform. This integration will ensure broader access to both central bank money and commercial bank money across all EU Central Securities Depositories (CSDs).

Additionally, Euroclear's strategy will encompass enhancing collaborative efforts between its local CSDs and Euroclear Bank. This collaboration is expected to yield more integrated and efficient services, ultimately benefitting market participants.

Investment in Infrastructure: Euroclear has reiterated its commitment to ongoing investment in infrastructure that supports a single market. This will involve establishing a pan-European infrastructure aimed at providing issuers access to a wide-ranging investor ecosystem, creating deep liquidity, and facilitating cost-effective services.

Building Collateral Management Solutions: The initiative will also leverage Euroclear's robust collateral management capabilities to bolster liquidity and stability across global financial markets.

Digital Transformation: Euroclear plans to collaborate closely with central banks and market players to develop next-generation digital infrastructures, ensuring they remain equipped to meet future challenges in the rapidly evolving financial landscape.

Conclusion

By 2026, Euroclear aims to fully complete its bank connectivity across all EU Member States and expedite its reach into T2S, emphasizing their commitment to providing unparalleled access to all market players. As the largest CSD group in Europe holding over half of the EU's issued securities and accounting for over 60% of settlement turnover, Euroclear remains pivotal to the region's financial ecosystem.

The ambitious vision set forth by Euroclear not only marks a crucial step towards efficient capital markets but also reflects a dedication to fostering an environment where innovation and competition can flourish, ultimately benefiting all participants in the European financial landscape.