- REUTERS/Brendan McDermid
- Sky News reported that NYSE owner Intercontinental Exchange will buy a 4% stake in clearing house Euroclear. The stake is believed to be worth around £200 million ($263 million). ICE’s purchase will give it an important role in European securities trading post-Brexit.
LONDON – The owner of the New York Stock Exchange, Intercontinental Exchange (ICE), is set to purchase a significant stake in one of Europe’s most important clearing houses, according to reports.
Sky News reported on Sunday evening that ICE will buy a 4% stake in Euroclear from RBS, worth roughly £200 million, with an announcement coming as early as this week.
It will represent another step in the exit from assets bought by the bank before it had to be bailed out by the government during the financial crisis.
ICE, RBS, and Euroclear have so far declined to comment on the reports.
Euroclear is a firm that flies somewhat under the radar, but plays a crucial role in European markets infrastructure, clearing trades on assets like stocks and bonds worth trillions of pounds every year.
Clearing houses like Euroclear act as a middle-man to guarantee the contract in the event that one of the parties involved in the trade goes bust. They have grown in importance since the financial crisis as a means of limiting systematic risk.
Founded by JPMorgan in the 1960s, Euroclear currently has around 130 shareholders, including the likes of Euronext, one of the continent’s largest stock exchange groups.
The location of euro-denominated trade clearing has been a hot topic since the euro first entered circulation in the late 1990s.
European policymakers have argued that euro clearing should take place within the euro area. Britain has repeatedly had to defend its right to clear euro trades, given that it does not have the euro. Years of disputes culminated in a legal battle in 2015, which the UK ultimately won.
However, Brexit has provided fresh impetus for those seeking to move clearing out of London. The ECB proposed a change to its statutes that would give it “a clear legal competence in the area of central clearing,” back in June.