Euroclear Closes Nordic CSD Acquisition
Euroclear and Nordic Central Securities Depository (NCSD) have announced that Euroclear’s acquisition of NCSD and its subsidiaries, APK and VPC, the Finnish and Swedish CSDs, respectively, became effective as of 31 October 2008. All regulatory and other approvals for NCSD to join the Euroclear group have been obtained. The company says that, as a result, the benefits of further post-trade infrastructure consolidation are to be shared among more users of central securities depositories (CSDs) in Europe.
It is intended that APK will be renamed Euroclear Finland and VPC will become Euroclear Sweden. Once the platforms of these entities are integrated within the Euroclear group, it will be possible for clients of these CSDs to access the post-trade infrastructure covering all markets served by Euroclear as in their respective domestic markets. This will be accomplished by utilising a multi-jurisdictional model, whereby securities held under different legal regimes in different countries are accessible and transferable through the same infrastructure and single operational account. Furthermore, the harmonisation of processing rules will reduce the complexity of cross-border transactions and create opportunities for synergies and cost reductions in client back-office systems and operations.
The migration of the Finnish and Swedish transaction-processing activities to Euroclear’s Single Platform is scheduled immediately after completion of the new platform, planned for 2011. In the interim, Market Advisory Committees will be created in each country to, for example, lead local market consultations on proposed harmonised market rules and practices, and local market functionalities that will be required for migration to the Single Platform.
As a result of platform consolidation and market-practice harmonisation, clients of the combined organisation can expect to save more than €350m per year in back office and operational costs. This is half of the estimated €700-800m in annual savings achievable through CSD platform consolidation and market-practice harmonisation across Europe.
Effective immediately, Kjell Arvidsson, currently chief executive officer of NCSD, will become chairman of both APK and VPC. Seppo Rantanen will continue in his current position as chief executive officer of APK. Anso Thiré, currently managing director and head of the global capital markets division at Euroclear SA/NV in Brussels, will relocate to Stockholm and become chief executive officer of VPC. Thiré will also have responsibility for the integration of both Nordic CSDs within the Euroclear group.