Euroclear sets out post-Brexit Irish CSD plans
22 February 2018 Dublin
Image: Shutterstock
International central securities depository (CSD), Euroclear, has published a paper in which it sets out a proposed structure for a new CSD in Ireland.
Euroclear’s plan is to have the new CSD operational by March 2019, to coincide with the withdrawal of the UK from the EU, two years on from the UK’s notification of its decision to leave.
The proposed establishment of this new CSD, named Euroclear Ireland (EIR), has been approved in principle by the Boards of Euroclear SA/NV (ESA) and Euroclear UK and Ireland (EUI).
Although the new CSD will be subject to some internal and external dependencies, including regulatory approvals and permissions in Ireland, the UK, Belgium and in the US.
EIR will need to submit an application for authorisation to the Central Bank of Ireland (CBoI) as its relevant competent authority under the Central Securities Depository Regulation (CSDR).
It explained that pre-authorisation discussions with the CBoI have begun, are at an early stage, and that its paper is separate from the authorisation process.
Euroclear said it has also begun discussions with other relevant regulatory authorities in Belgium, the UK, and the US.
It also suggested that its proposal involves the continuation of two legally distinct settlement systems, the ‘EIR system’ operated by EIR in accordance with Irish law; and the ‘EUK system’ operated by EUK in accordance with UK law.
Currently, EUI operates two securities settlement systems, the CREST UK system and the CREST Irish system, through one technical system.
It is advising clients that questions or feedback on this paper should be addressed to their relationship manager.
Euroclear said: “Our intention is that this new CSD would be based in Ireland and would be the issuer CSD for Irish corporate securities. We expect EIR to be subject to authorisation and ongoing supervision by the CBoI in accordance with the EU CSDR.”
Euroclear concluded that the establishment of EIR by end-March 2019 is a project “which is driven by the need to ensure that Euroclear is able to service the Irish corporate securities markets efficiently, and with legal certainty, at the point of a so-called ‘hard-Brexit’.”
Euroclear’s plan is to have the new CSD operational by March 2019, to coincide with the withdrawal of the UK from the EU, two years on from the UK’s notification of its decision to leave.
The proposed establishment of this new CSD, named Euroclear Ireland (EIR), has been approved in principle by the Boards of Euroclear SA/NV (ESA) and Euroclear UK and Ireland (EUI).
Although the new CSD will be subject to some internal and external dependencies, including regulatory approvals and permissions in Ireland, the UK, Belgium and in the US.
EIR will need to submit an application for authorisation to the Central Bank of Ireland (CBoI) as its relevant competent authority under the Central Securities Depository Regulation (CSDR).
It explained that pre-authorisation discussions with the CBoI have begun, are at an early stage, and that its paper is separate from the authorisation process.
Euroclear said it has also begun discussions with other relevant regulatory authorities in Belgium, the UK, and the US.
It also suggested that its proposal involves the continuation of two legally distinct settlement systems, the ‘EIR system’ operated by EIR in accordance with Irish law; and the ‘EUK system’ operated by EUK in accordance with UK law.
Currently, EUI operates two securities settlement systems, the CREST UK system and the CREST Irish system, through one technical system.
It is advising clients that questions or feedback on this paper should be addressed to their relationship manager.
Euroclear said: “Our intention is that this new CSD would be based in Ireland and would be the issuer CSD for Irish corporate securities. We expect EIR to be subject to authorisation and ongoing supervision by the CBoI in accordance with the EU CSDR.”
Euroclear concluded that the establishment of EIR by end-March 2019 is a project “which is driven by the need to ensure that Euroclear is able to service the Irish corporate securities markets efficiently, and with legal certainty, at the point of a so-called ‘hard-Brexit’.”
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