Reducing post-trade fragmentation will be a priority for Euronext for the next three years. The CSD has unveiled its new three-year strategic plan, “Innovate for growth 2027”, in which it cites fragmentation in the CSD landscape as the main culprit holding back investment opportunities in European capital markets.
Today, Euronext runs domestic CSDs in four countries – Italy, Portugal, Denmark, and Norway – that are connected to more than 20 international markets. Acknowledging its position as one of the largest networks of CSDs in Europe, the firm states that Euronext Securities is “ideally positioned” to address the fragmentation. The group has identified securities services as one of its key engines of growth. The expansion of Euronext Securities is thus an integral part of its new strategic plan, and is expected to “contribute to the growth of non-volume revenues” for the firm and support its bid to become “the gateway for European capital markets”.
The long game
Euronext’s effort to reduce fragmentation is a long running one, already in place even with its previous strategic plan, “Growth for impact 2024”. A milestone development under that strategy was the acquisition of Borsa Italiana Group in 2021. Markets Media quotes CEO and chairman of the managing board Stéphane Boujnah: “Transforming a local Italian-only clearinghouse into a pan-European multi-asset clearinghouse is a game changer. That has created integrated capabilities and a great catalyst for growth.”
The firm then took another big step towards defragmentation in September this year, when it completed the migration of its clearing business from LCH SA to Euronext Clearing. Says Boujnah, “We now have an integrated value chain with a single access point trading platform for all equity markets in all respective countries, and that has created the largest liquidity pool in Europe.”
