Euroclear is often referred to as the international depository or common depository and used for clearing and settlement purposes by thousands of companies yearly.
Euroclear is based in n Brussels, Belgium and specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. It was founded in 1968 as part of J.P. Morgan & Co. Euroclear settles domestic and international securities transactions, covering bonds (MTNs and more), equities, derivatives and investment funds. Euroclear provides securities services to financial institutions located in more than 90 countries.
Euroclear is the largest international central securities depository in the world.
Early history (1968-2000)
From its creation in 1968 until the end of 2000, the Euroclear System was operated by Morgan Guaranty Trust Company of New York (part of J.P. Morgan & Co), via the Belgian branch of that establishment, which had a team specially dedicated to the operation of the Euroclear System.
Euroclear has a non-exclusive partnership with Euronext (resulting from the merger of the stock exchanges of Amsterdam, Brussels, Lisbon and Paris), which enabled Euroclear in 2001 to acquire 100% of the capital of Sicovam, the French CSD, in 2002 100% of the capital of Necigef (Nederlands Centraal Instituut voor Giraal Effectenverkeer), the Dutch CSD, and in 2007, 100% of Caisse Interprofessionnelle de Dépôts et de Virements de Titres (CIK), the Belgian CSD. These local CSDs have accordingly been renamed as Euroclear France, Euroclear Netherlands and Euroclear Belgium respectively. Euroclear also took a 20% stake in the capital of LCH.Clearnet, the UK/French entity responsible for the clearing of Euronext, London Stock Exchange and other stock exchange transactions. Since December 2000, Euroclear has also assumed responsibility for the settlement of Irish government bonds (Gilts) following the decision of the Irish government and the Central Bank of Ireland to delegate this activity to Euroclear. In September 2002, Euroclear acquired 100% of the capital of CRESTCo, the CSD for UK securities and Irish equities, which now operates as Euroclear UK & Ireland. The CSDs of Finland (Suomen Arvopaperikeskus Oy (APK)) and Sweden (VPC AB), now operating as Euroclear Finland and Euroclear Sweden, respectively, were acquired by Euroclear in October 2008.
The Euroclear group reshaped its corporate structure in 2000 and 2001, transforming the Belgian company Euroclear Clearance System (Société Coopérative) into Euroclear Bank SA/NV, which now operates the Euroclear System and provides the services previously contracted to Morgan Guaranty Trust Company of New York, Brussels branch. In 2005, a new Belgian holding company, Euroclear SA/NV, was created as the owner of all the shared technology and services supplied to each of the Euroclear CSDs and the ICSD. Euroclear SA/NV is owned by Euroclear plc, a company organised under the laws of England and Wales, which is owned by market participants using Euroclear services as members.
Incorporated in Belgium, Euroclear SA/NV is subject to the supervision of the Belgium Banking, Finance and Insurance Commission (CBFA). In accordance with Article 8 of its Organic Law, the National Bank of Belgium (NBB) also has oversight of Euroclear SA/NV. Euroclear plc is authorised as a service company by the Financial Services Authority in the United Kingdom. Each of the Euroclear CSDs are regulated by the relevant authorities within their respective home countries.