Monthly report / Clearstream sees successful 2017

20.12.2017
  • Major post-trade infrastructure evolution tackled in 2017.
  • Tessler: “2018 will be all about value adding services for our clients.”
  • Positive development confirmed by growing volumes.

In 2017, the post-trade industry has seen a major infrastructure evolution. With completion of the European Central Bank’s TARGET2-Securities (T2S) project and preparations for the Central Securities Depositories Regulation (CSDR), some fundamental changes have been kicked off in the European post-trade market.

“2017 was about reshaping and harmonising Europe’s fragmented post-trade landscape to create a level playing field for all market participants”, said Jeffrey Tessler, Deutsche Börse Group Board Member and Chairman of the Group’s post-trade services provider Clearstream. “A lot of groundwork has been laid, with market infrastructures adapting their business models to the new regulatory requirements.”

Earlier this year, as part of the third and largest T2S migration wave, Clearstream successfully brought the German and Luxembourg market onto the pan-European settlement platform. Following this step, the company helps market participants to reduce the complexity and costs of their market connections by providing a centralised access to the T2S market, international markets and global markets.

“2018 will be all about equipping our clients to compete and succeed in this new environment,” Tessler adds. “We are harmonising our connectivity channels, modernising our custody network and improving our asset servicing and collateral management to make our customers’ lives a little easier – despite the regulatory burden and the uncertainty they are facing in the light of Brexit.”

Clearstream is currently in the process of launching its new asset servicing model, which combines the company’s global settlement expertise with the market know-how of local agents to simplify the asset servicing process on T2S.

Looking at Clearstream’s November figures, the positive development in the first nine months of 2017 (net revenues at €650.6 million YTD as of end Q3) has been confirmed by growing volumes. Investment Fund transactions increased by 23% (from 16.9 million YTD 2016 to 20.8 million YTD 2017), while Investment Funds under Custody rose by 17%(from €1,889 billion YTD in November 2016 to €2,204 billion YTD in November 2017). In April 2017, the firm’s Securities Lending activities reached the second highest volumes outstanding ever (€63.2 billion).

Business overview

 

November
2017

November
2016

Change (%)1

YTD 2017

YTD 2016

Change (%)1

International business (ICSD)

Securities deposits (EUR bn)

6,641

6,807

-2%

6,709

6,747

-1%

Number of transactions (mn)

4.2

3.4

23%

40.9

32.6

25%

Domestic business (CSD)2

Securities deposits (EUR bn)

4,628

4,436

4%

4,538

4,409

3%

Number of transactions (mn)

8.9

6.8

31%

84.5

71.0

19%

Investment Funds Services (IFS)

Securities deposits (EUR bn)

2,348

1,971

19%

2,204

1,889

17%

Number of transactions (mn)

2.1

1.8

17%

20.8

16.9

23%

Total

Assets under Custody (EUR bn)

13,617

13,214

3%

13,451

13,045

3%

Global Securities Financing (GSF)

Volume outstanding (EUR bn)

450.2

487.2

-8%

461.0

518.0

-11%

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1 Due to rounding, growth rates cannot be calculated from figures in the chart.

2 On 6 February 2017, Clearstream Banking Frankfurt has transferred its settlement volume to the pan-European securities settlement platform TARGET2-Securities. Since 7 February 2017, German settlement volume is processed solely via T2S.