Owner of NYSE Expands European Footprint With New Stake in Euroclear

By Alexander OsipovichFeaturesDow Jones Newswires

Intercontinental Exchange Inc. said on Tuesday that it has acquired a 4.7% stake in Euroclear, a move that expands the Atlanta-based company's reach into European financial markets.

ICE bought the stake for 275 million euros, or about $320 million, from Royal Bank of Scotland Group PLC, the two companies said. Euroclear is majority-owned by a consortium of more than 100 of its users, mainly banks.

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Euroclear, based in Brussels, is a big player in the behind-the-scenes business of settling trades in stocks, bonds and derivatives. It owns central securities depositories in Belgium, France and the Netherlands. These entities hold shares so that buyers and sellers of stocks don't actually have to exchange physical certificates.

In the first half of 2017, Euroclear held 28 trillion euros ($33 trillion) in assets for clients, according to its website.

ICE, which is the parent company of the New York Stock Exchange, is among the world's largest operators of clearing houses, the entities that stand in the middle of futures and derivatives trades. The firm has benefited from post-financial crisis regulations that forced many over-the-counter derivatives trades to be centrally cleared and described the Euroclear deal as "strategic."

ICE owns a number of futures exchanges and clearing houses in Europe, including the London-based exchange that is home to the popular Brent North Sea crude oil futures contract.

RBS, which is majority-owned by the U.K. government, has been gradually restructuring its business to shake the legacy of the financial crisis, which led it to be bailed out by taxpayers.

"The transaction is part of the continued reduction of assets in RBS and is in line with the bank's plan to strengthen its capital position," the bank said in a statement on the sale of its Euroclear stake.

RBS has faced repeated annual losses since the 2008 financial crisis. But it swung to a net profit for the first six months of 2017, bolstered by an unexpectedly strong performance in its investment banking division.

Write to Alexander Osipovich at alexander.osipovich@dowjones.com

(END) Dow Jones Newswires

October 24, 2017 15:18 ET (19:18 GMT)