Market Watch
Euroclear devotes team to across-the-board integration Euroclear, a key participant in this month’s securities services Sibos conference in Singapore, is to form an internal team dedicated to bringing about its plan for a harmonised pan-European capital market. Anso Thire, head of corporate strategy at Euroclear, said the 20-strong team would aim to bring about harmonisation within a minimum of five years. This has now become the first priority of Europe’s largest clearing house. “We are the first company to embark on a project to create a platform for a truly pan-European market. This team will work on nothing else,” said Mr Thire. Euroclear will try to improve links to those domestic central securities depositories (CSDs) which it does not already own – so-called “interoperability”. For example, Mr Thire stressed Euroclear would seek to smooth transactions between itself and Italy’s Monte Titoli, so that Euroclear members can trade and settle Italian stocks and bonds on the same day. Another key project is a “bridge” connecting to rival Clearstream, which should result in a streamlined link between the two CSDs, allowing same day turnaround of trades. The first phase of the bridge is due for completion in June 2004, with the final phase scheduled for November the same year. Euroclear will also work towards interoperability with stock exchanges – a “vertical” approach as opposed to the “horizontal” approach of working with fellow CSDs. “We would like to access as many exchanges as possible,” said Mr Thire. “We have started with Euronext Paris, but we now would like to see incentives for exchanges to offer favourable rates to CSDs.” But Euroclear has come in for severe criticism from Fair and Clear, a group of agent banks led by Citigroup and BNP Paribas, which believes that Euroclear’s banking and settlement businesses should be separated. They argue the company’s acquisitions of local CSDs allow the banking side to offer cut-rate prices, giving it an unjust advantage over other agent banks. Mr Thire responded that Euroclear’s business model would bring increased efficiency and reduce costs to investors. “Fair and Clear are against harmonisation as for them it would mean giving up a lucrative business share,” he said.
