​On 8 May 2019 Euroclear issued a whitepaper which describes the proposed future settlement model (replacing CREST with Euroclear Bank) in detail, and with the support of the Working Group and continued commitment from the Irish market, we expect to move to the implementation phase in the coming weeks.


Proposed Euroclear Bank (EB) model:

Under the proposed operating model for Irish corporate securities, EB will provide the notary, securities settlement and central maintenance services defined in Central Securities Depositary Regulations (CSDR) for the Irish securities held in EB, therefore becoming the Issuer CSD for those securities. New issues, asset servicing, banking services and other ancillary CSD services will be available for Irish corporate securities under this proposed model, but we await further detail from Euroclear.

Retail holders will continue to hold their positions directly on the register, preserving our current business model. Institutional holders are expected to hold beneath a registered depositary position in the name of Euroclear Nominees.

In practice, this means:

  • The register of members for each Irish corporate securities issue will be maintained in Ireland by the Issuer or its Registrar
  • Securities issued into EB as Issuer CSD will be registered in the name of EB's nominee company in the register of members
  • The securities will be distributed to, and held by, participants within their Securities Clearance Accounts in EB
  • Participants holding the security in their Euroclear Ba​nk Securities Clearance Accounts will have an interest in the security and will be entitled to its economic benefits, but do not become the legal owners of the security in accordance with Irish law (but will have a Belgian law interest in a fungible pool of that security - 'Belgian Law Rights')
  • The exercising of rights attached to the securities will fall under the participant's contractual arrangements with Euroclear Bank
  • The settlement of transactions in securities held in Euroclear Bank will take place via the participant's securities clearance accounts and:
    1. will have no impact on the register of members for such security (i.e. there is no transfer of legal title)
    2. will result in a transfer of Belgian Law Rights.

 

SWIFT interface

In order to facilitate this model, Registrars are required to build an interface between EB and their share registry systems. EB are proposing an ISO messaging model utilising the SWIFT network, and effectively replace the CREST interface we have today.

Computershare Investor Services (Ireland) Limited (CISIL) has been asked to build a SWIFT connection to Euroclear Bank during the Implementation Period. The required interface must be ready and duly tested by a firm deadline of March 2021.

 

Continued market engagement

The Irish market remains fully engaged to establish and define the underlying principles of the future solution as we move into the implementation phase.

CISIL is a member of the Irish User Committee and Euroclear Bank Working Group and is actively engaged to implement the solution with the key stakeholders.​​​