Euroclear reports strong 2017 first half
Record collateral outstandings of EUR 1.2 trillion; increased investment in regulatory-driven and cyber security initiatives
Brussels and London, 20 July 2017 - 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 2017, client assets held in safekeeping increased to EUR 28.4 trillion and the group processed securities worth a total value of EUR 369 trillion, benefitting from buoyant conditions in the markets we serve. Collateral outstandings reached record levels with a total of EUR 1155 billion on Euroclear’s Collateral Highway in June 2017, up 14% from the previous year.
The key operating results for the group, for the first half of the year, include the following figures, compared to last year:
- Value of securities held on behalf of Euroclear clients, increased by 5% to EUR 28.4 trillion
- Turnover, the value of securities transactions processed, up by 14% to EUR 369 trillion
- The number of netted transactions settled in the Euroclear group rose by 11% to 107 million
- The number of daily collateralised transactions mobilised by Euroclear’s Collateral Highway was up 14% to EUR 1155 billion
- Fund assets under custody increased 15% as Euroclear progressed its funds strategy
Lieve Mostrey, Chief Executive Officer of the Euroclear group, commented:
“Financial market conditions have been supportive to date, with record levels of client activity, and we reached record levels of collateral outstanding on our Collateral Highway.
Euroclear is accelerating its investments in both regulation-driven initiatives and cyber security, while continuing to develop its offering for clients globally.”
Euroclear’s strategic vision is to remain a leading partner for the global capital markets, by providing services that improve efficiency of the world’s financial markets and meet specific client needs.
To this end, the group’s focus is on strengthening its traditional business in Europe; progressing its growth initiatives in collateral, funds and in international markets, while also exploring adjacent opportunities enabled by data and new technology, such as blockchain.
Investing in Euroclear’s European Core
As planned, the group has stepped-up investment in its European core, further strengthening the safety of financial markets by attaining compliance with CSDR and through advanced cyber security capabilities.
Meanwhile, Euroclear’s ambition to become the gateway to European markets connected to T2S is making headway. Just a year after joining T2S in September 2016, Euroclear’s ESES CSDs will offer direct access to six major T2S markets (Belgium, France, Germany, Italy, Netherlands and Spain) as either issuer or investor CSD, across eligible asset classes including equities, fixed income securities, and domestic funds and ETFs.
Progressing growth initiatives
Euroclear is partnering with industry participants to meet the financial market’s need for innovative collateral management services.
Notably, the joint venture with the DTCC, GlobalCollateral Ltd, continues to gain momentum with considerable client interest around its new Inventory Management Service (IMS), a transformative solution that enables market participants to seamlessly mobilise securities from the DTC to Euroclear bank for use as collateral. The service was launched during the first half 2017.
In addition, the group signed a partnership with Elixium, part of the Tradition group, to develop a new European collateral exchange. This innovative offer will be easily accessible through Elixium’s electronic platform, providing access to new participants, such as the buy-side, and improving efficiency of the collateral marketplace.
Euroclear continues to progress its strategy to develop FundsPlace, its vision of a relevant and industry-specific market infrastructure for funds. By doing so, FundsPlace opens new opportunities, such as to leverage funds and ETFs for collateral management. Further progress was made in the international exchange-traded funds (ETF) sector where the trends of globalisation and the rise of passive management have driven a 30% annual increase in deposits since 2014.
As an open, neutral infrastructure, Euroclear also has a role to play in bringing all financial market participants together to develop innovative solutions for the public good. For example, Euroclear has launched a new working group in France – with the full backing of industry bodies - to explore how the model for the distribution of funds can be further enhanced.
International investors are increasingly seeking efficient access to growth economies. Through its Global Capital Markets initiative, Euroclear collaborates with markets in Asia, Latin America Middle East and Africa to develop ‘Euroclearable’ markets that address the international investors’ needs.
Substantial progress has been made in Latin America in 2017, where we have been helping support the growth ambitions of the MILA economies and others in the region, resulting in Chile and Argentina, issuing ‘Euroclearable’ local currency. In both cases, foreign investors’ capital inflows increased by over 20% with the countries also receiving a higher weighting in several world bond indices.
The Peruvian Ministry of Economy and Finance has also embarked into 2 years of local reforms in order to issue its first ever "euroclearable" bonds by end July 2017.
Partnering to explore new technology solutions
The group is exploring a number of other areas of innovation such as its new partnership with Quantessence, a UK-based fintech company. Quantessence delivers an open architecture platform that manages the running of predefined asset allocation algorithms. The first application on the platform will offer a service for iCPPI products, a strategy used in risk management.
Euroclear is also one of seven founding shareholders of the a new fintech venture, Liquidshare, which will develop applications using blockchain technology to make post-trade operations more efficient for small and medium enterprises in Europe.
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 655 trillion in securities transactions in 2016, representing 196 million domestic and cross-border transactions. In the first half of 2017, the group held EUR 28 trillion in assets for clients.
For more information about Euroclear, please visit www.euroclear.com.