Euroclear 2016 interim results
Euroclear reports continued momentum in the implementation of its strategic initiatives, despite uncertain markets
Brussels and London, 18 July 2016 - As the financial industry’s trusted provider of post-trade services, Euroclear continues to support capital market participants’ evolving needs. In the first half of 2016, client assets held in safekeeping were EUR 27.0 trillion and the group delivered EUR 324 trillion in the value of securities processed. Collateral outstandings were EUR 1,012 billion, stable compared to prior year, despite the adverse impact of foreign exchange.
The key operating results for the group during the first half of 2016 include:
- The value of securities held on behalf of Euroclear clients, of EUR 27.0 trillion, remains stable from December 2015
- Turnover, the value of securities transactions settled, was EUR 324 trillion; a 4.5% decrease on the prior year period
- The number of netted transactions settled in the Euroclear group reduced by 0.8%, compared with the prior year period, to over 96 million
- Euroclear’s Collateral Highway mobilised an average of EUR 1012 billion of collateralised transactions daily; unchanged from the prior year period
- Euroclear FundsPlace provides access to the global funds universe in a secure, automated environment. Fund assets under custody increased 2% over prior year, following the continued growth of the international ETF structure. The value of funds serviced by the FundSettle platform reduced by 4%, with the volume of fund transactions processed by the group totalling 10.5 million
Tim Howell, Chief Executive Officer of the Euroclear group, said: “Financial market conditions have been more challenging over the past six months, as they have been since mid-2015. Client activity levels have remained stable for the year-to-date, albeit at lower levels than last year. Euroclear continues to support the development of efficient and stable capital markets, both through regulation-driven initiatives in our European franchise, as well as capabilities and services for clients globally. ”
Euroclear continues to make progress with its implementation of TARGET2-Securities (T2S), the ECB’s common securities settlement platform. Having worked closely with market participants to test the functionality of the platform, Euroclear’s ESES CSDs (in Belgium, France and the Netherlands) remain on track to migrate to the T2S platform in September 2016.
Euroclear is further investing in its Nordic markets to support its clients’ evolving needs. Euroclear Finland is replacing its entire securities processing infrastructure with a new settlement system, known as Infinity. Following Infinity’s launch last year, a second phase of functionality is scheduled for November 2016. Once delivered, Euroclear Finland will be CSD Regulation (CSDR) compliant, and further advanced in its preparations for its migration to the T2S platform, scheduled for September 2017.
Euroclear Sweden is also replacing its own CSD infrastructure. The new platform, known as EuroclearSafe, will leverage our investments made in Finland, bringing scale efficiencies to both financial markets and meeting the requirements of CSDR.
Preparations for the implementation of CSDR remain a focus for the group. Euroclear is well advanced with its CSDR implementation projects. Euroclear (I)CSDs will apply for authorisation under the new regulation, in line with the EU’s revised timetable.
With over EUR 1 trillion daily average outstanding, Euroclear’s Collateral Highway meets financial market participants’ increasing requirement for collateral that can be mobilised across borders and time zones. Euroclear is building on this success through our joint venture with the Depository Trust & Clearing Corporation (DTCC) to connect two of the largest pools of collateral worldwide. In 2016, the joint venture – DTCC-Euroclear GlobalCollateral Ltd. – will begin to roll-out its collateral margin utility, bringing unprecedented operating efficiencies to market participants and improving the stability of financial markets.
ETF issuers are increasingly looking to Euroclear to support them in broadening their international investor base. On behalf of BlackRock, the world’s largest ETF issuer, Euroclear recently supported the largest ever corporate action in the ETF industry, finalising the transfer of its USD 200 billion domestic ETF programme to the international structure, with a final tranche of 165 ETFs migrating in the period. Meanwhile, State Street decided to move 29 ETFs to the international structure, as part of its decision to transfer settlement for 40 of its SPDR ETFs to Euroclear’s FundSettle platform. Euroclear also collaborated with Hong Kong based fund manager, Fullgoal Asset Management to issue an RMB-denominated ETF in the international structure.
Euroclear continues to develop innovative solutions that support the financial markets, often working in collaboration with market participants. Notable initiatives include those looking at potential applications of blockchain technology in London’s gold bullion market and for European small- and medium-sized enterprises, as well as the launch of e-data Liquidity, a new service that allows users to gain insight of the liquidity into specific debt instruments.
Note to editors
Euroclear group is the financial industry’s trusted provider of post trade services. At the core, the group provides settlement, safe-keeping and servicing of domestic and cross-border securities for bonds, equities and derivatives to investment funds. Euroclear is a proven, resilient capital market infrastructure committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise.
The Euroclear group includes Euroclear Bank - which is rated AA+ by Fitch Ratings and AA by Standard & Poor’s - as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 675 trillion in securities transactions in 2015, representing 191 million domestic and cross-border transactions. In the first half of 2016, the group held EUR 27 trillion in assets for clients.