FinTechSystemsLondon Stock Exchange to Establish Luxembourg Central Securities Depositary

London Stock Exchange to Establish Luxembourg Central Securities Depositary

The London Stock Exchange (LSE) has announced plans to establish a central securities depositary (CSD) in Luxembourg, building on its existing Italian CSD and following previously-outlined plans to compete more aggressively in settlement.

The LSE added that JP Morgan will provide it with settlement, custody and asset servicing as part of its international collateral management business.

A statement said the Luxembourg CSD will “allow the group to broaden its customer base as it expands its custody and settlement services”. It will also support clients as the European Market Infrastructure Regulation (EMIR) is introduced across the region.

EMIR will require the majority of over-the-counter (OTC) derivatives trades to be cleared through a central counterparty (CCP), who are required to hold collateral assets as an insurance policy against any defaults at a securities settlement system, such as a CSD, where possible.

The new CSD is regarded as a potential rival to Deutsche Boerse’s Clearstream service and Euroclear and builds on the existing structure of the LSE’s Italian CSD, Monte Titoli, which is the third-largest in Europe. It is expected to begin operations in the first half of 2014.

JP Morgan said it will use the LSE as its CSD in its strategy for Emir. The agreement to use the CSD “enhances JP Morgan’s collateral management service,” according to a statement from the group.

Related Articles

Vayana Network hits $1bn in trade financing

India Vayana Network hits $1bn in trade financing

5d GTNews
LATAM economic activity hindered by political uncertainty

Latin America LATAM economic activity hindered by political uncertainty

1m Laura Noble
India-US trade corridor: Accelerating growth with reverse factoring

Deals & Markets India-US trade corridor: Accelerating growth with reverse factoring

4m Vinod Parmar
China’s regulatory changes stimulate international interest

Asia Pacific China’s regulatory changes stimulate international interest

5m Michael McCaw
“Destroy or democratise” – how Open Banking will impact connectivity

Banking “Destroy or democratise” – how Open Banking will impact connectivity

5m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
Money market reforms: Navigating LVNAV, CNAV and VNAV

EEA Money market reforms: Navigating LVNAV, CNAV and VNAV

6m Victoria Beckett
The Challenge of Building and Maintaining a Central Treasury Operation in a Decentralized Company

EEA The Challenge of Building and Maintaining a Central Treasury Operation in a Decentralized Company

6m BELLIN