07 March 2018

Financial Times: Euroclear to move holding company from London to Brussels

The group will shift its domicile and tax residency to Brussels, its biggest centre of operations, later this year.

The move is the second part of a two-stage plan in reaction to Brexit after unveiling last month plans to build a securities settlement system for Ireland that did not rely on London.

Euroclear operates settlement houses that are critical to the daily functioning of global markets. It holds €28.6tn in assets, typically highly liquid instruments such as top-rated government bonds or cash, for investors to use for securities and derivatives trading.

It has been in business for 50 years and has historically been a UK plc and tax resident in Switzerland. Both will be based in Belgium next year. Euroclear will continue to operate a London subsidiary to serve the UK, one of its biggest markets.

“We want to redomicile the topco to the eurozone. It will be in Belgium as it’s where most of our business operations are. We are preparing to launch a transfer of arrangement sometime after the summer,” Lieve Mostrey, chief executive of Euroclear, told the Financial Times.

She described it as making sure Euroclear had got certainty over its legal environment. “For the type of company we are we feel more comfortable in the eurozone.”

The plans were revealed during an investor day in London on Tuesday. The group reported a 10 per cent increase in settlement volume to 215m netted transactions last year.

Euroclear is also planning to split its joint UK and Ireland securities depository ahead of the UK’s departure in March next year. Dublin has used EU passporting arrangements to settle trades executed on the Irish stock exchange in London. It also meant cheaper trading costs for investors. [...]

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