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Nordic Central Securities Depository sells out to Euroclear Group

The four Scandinavian banks that own the Nordic Central Securities Depository (NCSD) – Nordea, SEB, Svenska Handelsbanken and Swedbank – have agreed to sell their shares in the business to Euroclear. The deal is expected to complete by the end of the year, subject to regulatory approval, and it is hoped the consolidation of the NCSD’s settlement and transaction processing activities with Euroclear will eventually lead to cost savings, especially after the entity joins Euroclear’s Single Platform immediately after the technology project’s completion in 2011.

NCSD comprises of the Finnish and Swedish CSDs, respectively APK and VPC. Based upon the latest 2007 figures, the combined group will settle the equivalent of EUR 575 trillion in securities transactions, representing 198 million domestic and cross-border transactions across Europe, holding more than EUR 20 trillion in assets for clients at any given time.

Full details of the still-to-be finalised deal are yet to be revealed but the cost is thought to be approximately EUR 313 million
split between the four banks, with Nordea receiving slightly the highest amount at EUR 90 million for its stake in NCSD.

Commenting on the provisional agreement, the CEO of Euroclear Group, Pierre Francotte, said he expected the merger to add breadth and depth to the group. “The Finnish and Swedish markets are actively participating in shaping a pan-European platform to meet the capital market’s post-trade needs,” he explained.

The deal is one of a number of such agreements that are expected to be completed over the coming years as the post-trade clearing and settlement landscape in Europe consolidates under the pressure of the EU’s Code of Conduct, the updated TARGET2 Securities system and the Giovanni interoperability protocols.

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