8/2/2019 5_der (1)
1/18
How Euroclear manages theinteroperability with thedifferent markets
8/2/2019 5_der (1)
2/18
Agenda
The Euroclear group
Creating a European Domestic Market, an exemple ofcooperation and consolidation among the CSDs of theEuroclear group
Euroclear Banks links with the different markets
8/2/2019 5_der (1)
3/18
Euroclear Group structure
As of Jan 2005
219 User Shareholders Euroclear Plc Sicovam Holding
Euroclear SA/NV
Amsterdam branch
Paris branch
London branch
Euroclear
Nederland
Euroclear
France SA CRESTCo Ltd
Euroclear
Bank SA/NV
8/2/2019 5_der (1)
4/18
Q2 200Turnover
Euroclear BankCRESTCo Euroclear France
tril
0
50
100
200
250
350
150
300
6 months
2002
241.9
2003
256.2
2004
307.1
2005
171.4
61
36.3
74.1
85.4
53
103.5
85.5
52.6
118.1
114.4
60.1
132.6
8/2/2019 5_der (1)
5/18
Value of securities held
Euroclear BankCRESTCo
Euroclear FranceEuroclear Nederland
Q2 200
14.6
tril
0
2
4
6
8
10
12
14
30 June
2002 2003 2004
10.911.9
13.1
2005
0.7
2.2
3.2
4.8
0.7
2.4
3.5
5.35.9
3.8
4.1
2.6
30.8
0.8
6.7
8/2/2019 5_der (1)
6/18
Agenda
The Euroclear group
Creating a European Domestic Market, an exemple ofcooperation and consolidation among the CSDs of theEuroclear group
Euroclear Banks links with the different markets
8/2/2019 5_der (1)
7/18
Consolidation of settlement is necessary to make
European capital markets competitivefor issuers and investors
European capital markets infrastructureThe problem of fragmentation
Settlement is a key component of capital markets efficiency
National markets not a European market
At least one CSD per country
fragmentation has a major impact on efficiency, cost and risk
Both Harmonisation and Consolidation enable efficiency gains,
and reduction of costs and risks
8/2/2019 5_der (1)
8/18
Our vision is full consolidation of markets within
Euroclear Group
Full integration of legacy systems and functionality
Single Settlement Engine
Common User Interface
CRESTEuroclear
France
Euroclear
NetherlandsCIK
Euroclear
Bank
Customer
Domestic Service Full Service
Agent
Central
Banks
&
Paymentsystems
8/2/2019 5_der (1)
9/18
From todays fragmentation towards consolidation
CIK E NL E F CREST E B
Current situation
Positioning & booking
Legal record
Core Processing
Client Communication Interface
Legacy
Country boundary
Step 1 SSE (2006)
CIK E NL E F CREST E B
SSE
ESES-CCIe-RGV - E2A
ESES - SP component
ESES - RGV upgrade
SSE
CIK E NL E F CREST E B
Step 2 ESES (2007)
Step 3 Single Platform(in phases from 2008)
SSE
CIK E NL E F CREST E B
CCI
Single ApplicationPlatform
Legend
8/2/2019 5_der (1)
10/18
ConclusionEuroclears business model meets the
challenges facing the European markets Creating efficiency (e.g. reduce costs) and reduce risks while retaining
choice and competition
Eliminating differences in technologyboth standards and processes
Harmonising market practices and legal/regulatory framework
Offering a settlement model that allows choice of service levels to meet
the needs of all issuers investors, and intermediaries
8/2/2019 5_der (1)
11/18
Agenda
The Euroclear group
Creating a European Domestic Market, an exemple ofcooperation and consolidation among the CSDs of theEuroclear group
Euroclear Banks links with the different markets
8/2/2019 5_der (1)
12/18
Euroclear Banks services
MoneyTransfer
Settlementservices
Custodyservices
Credit and Banking Services
Tri-Partyservices
Lending&
Borrowing
FundSettle
8/2/2019 5_der (1)
13/18
Domestic debtAustria
Belgium
Denmark
Finland
France
Germany
Ireland
Greece
Italy
Luxembourg
theNetherlands
Norway
South Africa
Spain
Portugal
Sweden
the UnitedKingdom
Russia
Switzerland
Australia
Indonesia
Malaysia
thePhilippines
Hong Kong
Thailand
Japan
Singapore
Against paymentFree of payment
Argentina
USA
Canada
Mexico
New Zealand
8/2/2019 5_der (1)
14/18
Equities
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Italy
Ireland
Hong Kong
Malaysia
Singapore
Japan
Norway
Spain
theNetherlands
Portugal
Sweden
Switzerland
Luxembourg
the UnitedKingdom
Argentina
USA
Canada
Mexico
SE Settlement
8/2/2019 5_der (1)
15/18
Borrowers
Lenders
Seller
Purchaser
52 %
10 %
Broker/dealers8 %
Other participants4 %
26 %
No client sector stands by itself
Fixed income
Equities
Derivatives
Activity breakdown by market segment
8/2/2019 5_der (1)
16/18
Accessing new markets
1. Issuance of eurobonds-> acceptance of denomination currency-> acceptance of settlement currency
SETTLEMENT CURRENCIES IN EB DENOMINATION CURRENCIES IN EB
CURRENCY ISO CODE CURRENCY ISO CODE
ARGENTINE PESO ARS UAE DIRHAM AED
AUSTRALIAN DOLLAR AUD BULGARIAN LEV (replaced by BGN) BGL
CANADIAN DOLLAR CAD BULGARIAN NEW LEV BGN
SWISS FRANC CHF BAHRAINI DINAR BHD
CZECH KORUNA CZK BERMUDIAN DOLLAR BMD
DANISH KRONA DKK BRAZILIAN REAL BRL
ESTONIAN KROON EEK BOTSWANA PULA BWP
EURO EUR CHILEAN PESO CLP
BRITISH POUND GBP CHINESE YUAN RENMINBI CNY
HONG KONG DOLLAR HKD COLOMBIAN PESO COP
HUNGARIAN FORINT HUF CYPRUS POUND CYP
CROATIAN KUNA HRK EGYPTIAN POUND EGP
INDONESIAN RUPIAH IDR INDIAN RUPEE INR
ISRAELI NEW SHEKEL ILS KAZAKSTAN TENGE (10/10/2005) KZT
ICELANDIC KRONA ISK KOREAN WON KRW
JAPANESE YEN JPY LEBANESE POUND LBP
KUWAITI DINAR KWD MOROCCAN DIRHAM MAD
LITHUANIAN LITAS LTL MALTESE LIRA MTL
LATVIAN LATS LVL MADEDONIA DENAR (10/10/2005) MKD
MEXICAN NUEVO PESO MXN NICARAGUAN CORDOBA NIO
MALAYSIAN RINGGIT MYR PERUVIAN NUEVO SOL PEN
NORWEGIAN KRONA NOK ROMANIAN LEU (will cease to exist end Dec '06) ROL
NEW ZEALAND DOLLAR NZD RUSSIAN RUBLE (replaced by RUB) RUR
PHILIPPINE PESO PHP RUSSIAN RUBLE (RUB=RUR/1000) RUB
POLISH ZLOTY PLN SAUDI RIYAL SAR
ROMANIAN NEW LEU RON TURKISH LIRA (will cease to exist end Dec '05) TRL
SWEDISH KRONA SEK TAIWAN DOLLAR TWDSINGAPORE DOLLAR SGD UKRANIAN HRYVNIA UAH
SLOVAK KORUNA SKK URUGUAYAN PESO UYU
SLOVENIAN TOLAR SIT VENEZUELIAN BOLIVAR VEB
THAI BAHT THB VANUATU VATU VUV
TURKISH NEW LIRA (TURKISH LIRA as of 01/01/06) TRY CFA FRANC BEAC (Cameroon) XAF
UNITED STATES DOLLAR USD GOLD XAU
SOUTH AFRICAN RAND ZAR SDR INTERNATIONAL MONETRARY FUND XDR
CFA FRANC BCEAO (Sngal, Cte D'ivoire) XOF
Last update: 23 August 2005 ZAMBIAN KWACHA ZMK
2 Access to the national domestic securities markets
8/2/2019 5_der (1)
17/18
2. Access to the national domestic securities marketsMajor determining factors guiding the decision to
service a market
International flows
Operational Risk
Reputation Risk
Liquidity Risk
Legal Risk
Sufficient international demand from international
investors justifying a link
Operational procedure
Service level agreements
Contractual relationship external agents
Choice of agentsdepositories
(settlement + payments, asset servicing)
Free access to the currency
Credit Lines with cash correspondents (settlements +
payments)
Asset protection
Enforceability of contracts
8/2/2019 5_der (1)
18/18
Top Related