From 6 September Euroclear Bank will offer clients centralised settlement of Euronext Amsterdam trades, cleared by LCH.Clearnet. This means Euroclear Bank clients can now settle cross-border equity transactions on three Euronext markets and the London Stock Exchange in a single location. Dutch shares traded on the London Stock Exchange, cleared by LCH.Clearnet, can now also be settled by Euroclear Bank.
“The new service for Euronext Amsterdam trades will complement the existing domestic settlement service offered by Euroclear Nederland to Euronext Amsterdam members,” says a Euroclear spokesman. “However, it will offer clients a new choice of settlement location as an alternative to the tailored services offered by intermediaries, which may be particularly interesting in terms of price and efficiency.”
Euroclear Bank says users of the service save money primarily because they can “rationalise their own back-office structures to centralise the settlement of these transactions through a single desk, thereby substantially reducing their own back-office costs and complexities.” But the bank is also reducing its tariffs for settling French and UK equities. Settlement fees are being reduced by up to 20% for UK equity transactions (Euroclear Bank explains that “recent volume increases have enabled Euroclear Bank to pass on to clients the benefits of greater economies of scale”) and safekeeping fees for French equities by up to 50%. These reductions follow a 50% average settlement-fee reduction implemented by Euroclear Bank for off-exchange Belgian and French equity transactions in April 2004. That reduction will kick in for off-exchange Dutch equity trades in October 2004.
“The liberty of working independently with Europe’s major stock exchanges to deliver efficient and low-cost cross-border settlement alternatives is providing the market with more choice and benefits than ever before,” says Ignace R. Combes, Deputy Chief Executive Officer of Euroclear Bank. “As more market participants use Euroclear Bank as their single platform to settle cross-border equity and fixed-income trades, we will continue to seek opportunities to lower our tariff for these services and to develop additional services based on market demand.”