Owner of NYSE Expands European Footprint With New Stake in Euroclear
October 24 2017 - 3:33PM
Dow Jones News
By Alexander Osipovich
Intercontinental Exchange Inc. said on Tuesday that it has
acquired a 4.7% stake in Euroclear, a move that expands the
Atlanta-based company's reach into European financial markets.
ICE bought the stake for 275 million euros, or about $320
million, from Royal Bank of Scotland Group PLC, the two companies
said. Euroclear is majority-owned by a consortium of more than 100
of its users, mainly banks.
Euroclear, based in Brussels, is a big player in the
behind-the-scenes business of settling trades in stocks, bonds and
derivatives. It owns central securities depositories in Belgium,
France and the Netherlands. These entities hold shares so that
buyers and sellers of stocks don't actually have to exchange
physical certificates.
In the first half of 2017, Euroclear held 28 trillion euros ($33
trillion) in assets for clients, according to its website.
ICE, which is the parent company of the New York Stock Exchange,
is among the world's largest operators of clearing houses, the
entities that stand in the middle of futures and derivatives
trades. The firm has benefited from post-financial crisis
regulations that forced many over-the-counter derivatives trades to
be centrally cleared and described the Euroclear deal as
"strategic."
ICE owns a number of futures exchanges and clearing houses in
Europe, including the London-based exchange that is home to the
popular Brent North Sea crude oil futures contract.
RBS, which is majority-owned by the U.K. government, has been
gradually restructuring its business to shake the legacy of the
financial crisis, which led it to be bailed out by taxpayers.
"The transaction is part of the continued reduction of assets in
RBS and is in line with the bank's plan to strengthen its capital
position," the bank said in a statement on the sale of its
Euroclear stake.
RBS has faced repeated annual losses since the 2008 financial
crisis. But it swung to a net profit for the first six months of
2017, bolstered by an unexpectedly strong performance in its
investment banking division.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
October 24, 2017 15:18 ET (19:18 GMT)
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