Pim Rank: Euronext versus Euroclear - the winner takes it all?

November 28, 2025

^{This column was originally written in Dutch. This is an English translation.}

Euronext wants to settle transactions carried out on its stock exchanges through its own securities depository. The question is whether this will benefit the market.

By Prof. Mr. W.A.K. Rank, Solicitor at NautaDutilh in Amsterdam and Professor of Financial Law at Leiden University.

On most regulated markets, the trading function and the custody and settlement function have traditionally been performed by different parties. The trading function is the domain of the stock exchange operator, while the custody and settlement function is performed by a central securities depository (CSD) that is independent of the stock exchange operator. This CSD is then designated by the stock exchange operator as the settlement organisation for the settlement of securities transactions carried out on the stock exchange. However, the position of the independent CSD is compromised if an exchange operator wants its own CSD to handle the settlement of securities transactions carried out on its exchanges.

In the Netherlands, the stock exchange function is performed by Euronext Amsterdam. The CSD function is performed by Euroclear Nederland. This institution has the status of a central institution under the Securities Giro Transfer Act (Wge) and has been designated by Euronext as the settlement organisation for the settlement of securities transactions entered into on Euronext Amsterdam. Several other Euronext exchanges have an identical structure: for example, on the Euronext stock exchanges in Brussels and Paris, the settlement function is also entrusted to a CSD belonging to the Euroclear group. However, in Denmark, Italy, Norway and Portugal, Euronext uses its own CSD, Euronext Securities.

Following the Draghi report, Euronext announced its ambition to take over the settlement of securities transactions carried out on its markets by using its own CSD. In its strategic plan Innovate for Growth 2027, Euronext announced its intention to expand its CSD activities in 2026. On 12 March 2025, the stock exchange operator announced that the Euronext exchanges in the Netherlands, Belgium, France and Italy will designate Euronext Securities Milan as the CSD for the settlement of share transactions carried out on those exchanges from September 2026 onwards.

In this context, Euronext points to the advantage of “one-stop shopping”: whereas trading on different Euronext exchanges currently implies that settlement must be carried out via as many different CSDs, in future this could be done via a single CSD, namely Euronext Securities Milan. This should simplify settlement and lead to lower costs. However, this is not certain. If market participants continue to use Euroclear's services for the settlement of transactions on exchanges other than the Dutch, Belgian, French and Italian exchanges, the involvement of Euronext Securities is more likely to lead to greater fragmentation. In addition, the market participants concerned will have to adapt their systems to enable settlement via Euronext Securities. This will entail additional costs during the transition phase.

The consequences for Euroclear could be far-reaching. If Euronext's plans go ahead, Euroclear will lose an important source of income. In theory, the Euroclear entity in question could continue to act as issuer CSD for issuers. However, if Euronext manages to keep costs within limits, there is a good chance that issuers will switch to Euronext Securities, simply because this party is linked to the stock exchange and the central clearing organisation. For intermediaries, too, costs will be a decisive factor.

Euronext's plan is in line with Draghi's desire to have a single CSD for the entire EU at some point. However, a single CSD also means that there will be no more competition and no need for further innovation. This is all the more true if that CSD also belongs to the stock exchange organisation.