Euroclear

The Euroclear System was operated by the Belgian branch of Morgan Guaranty Trust Company from its founding in December 1968 until the start of 2001, when they transferred control to Euroclear Bank.[2] Kidder Peabody had been the first major trading firm to tell the market that it would only deal with firms that cleared through Euroclear. Euroclear's creation provoked a reaction in Luxembourg among firms which were competitors with Morgan, and who feared that Morgan could use their settlement data to its trading advantage. This led to the launch of a competitor, Luxembourg-based Cedel, in September 1970.[3]

Seat of Euroclear Bank in Kraków, Poland

Euroclear acquired Sicovam (the French central securities depository or CSD) in 2001, Necigef (Nederlands Centraal Instituut voor Giraal Effectenverkeer), the Dutch and CRESTCo Ltd, the CSD for UK & Irish securities using the CREST application in 2002. It acquired Caisse Interprofessionnelle de Dépôts et de Virements de Titres (CIK), the Belgian CSD, in 2007. These local CSDs were renamed as Euroclear France, Euroclear Netherlands, Euroclear UK & Ireland 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. 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.

In October 2012, Euroclear granted access to Russia’s National Settlement Depository, making it easier for other countries hooked to Euroclear's system to trade with Russia, and making Russia’s capital market integrated into London's and New York's markets.[4] 3 years later, Russia mimicked the Euroclear system to create an exchange system with China.[5]

In May 2013, Euroclear and the US' Depository Trust and Clearing Corporation offered access to each other’s vast inventory of collaterals. While the initial offering provides a two-way automatic transfer and retention of collaterals, it is intended to evolve as a single pool of depositories.[6]

In April 2014, Euroclear linked its system to the Central Latinoamericana de Valores to open Panama to international investors, thus creating a single pool of liquidity.[7]

In February 2015, Mexico opened up its corporate bonds to Euroclear's trading platform, hoping it will facilitate and increase raising funds for its development programs.[8]

In March 2016, the central bank of France linked with Euroclear for securities lending,[9] and with the Mexican Stock Exchange to connect the Mexican mutual funds market with the Belgian trade company.[10]

In an article in Foreign Affairs and in a subsequent interview, economist Benn Steil, a senior fellow and director of international economics at Council on Foreign Relations (CFR), and CFR analyst Benjamin Della Rocca argued that Russia may have - in transactions executed through the Central Bank of China and then likely through Chinese state-owned banks as intermediaries - deposited $80 billion in U.S. Treasury bonds at Euroclear in the buildup to the 2022 Russian invasion of Ukraine.[11][12]

The Russian depository blocked and froze all securities held in Euroclear's account at the Russian depository, on March 1, 2022.[13] The Russian depository also froze payments on securities of Russian issuers from being made to foreign individuals and entities.[13]

On March 18, 2022, Euroclear restricted operations on the account of the Russian National Settlement Depository; it stopped executing any instructions to carry out transactions with securities and money, including instructions to participate in corporate actions on foreign securities.[13]

Euroclear also disabled its ruble accounts with ING Bank in Russia and Russia's VIB Bank, the result of which was that its clients are no longer allowed to transfer any rubles, and the ruble bridge between Clearstream and Euroclear was closed.[13] Furthermore, Euroclear stopped settling trades in Russian securities.[14][15]

On 25 March 2015, New York federal judge Thomas Griesa ordered Euroclear to stop processing payments of Argentina's debt bonds.[16][17] This court injunction follows Argentina's decade-long dispute with its creditors.[18] The next day, the trading bridge between Euroclear and Clearstream on those Argentine bonds were also shuttered until further notice.[19] The intent of this injunction was to force Argentina to fully pay their creditors in order to gain back access to its bond-selling program.[20]

In April 2012, Euroclear participated in the restructuring of the Greek debt by swapping 41 billion euros of Greek bonds, which represented about a third of the foreigner-held Greek debt.[21]

In June 2022, Euroclear participated in blocking Russian funds resulting in a default of bond repayment.[22]

• Media related to Euroclear at Wikimedia Commons
• Official website
• T2S Project of the Eurosystem