Statement - Ireland’s Securities Settlement Market successfully migrated from the UK to Belgium

• Successful market migration supports the Central Bank's objective to ensure the financial system operates in the best interests of consumers and the wider economy

The Central Bank of Ireland welcomes the successful migration of Ireland’s securities settlement from Euroclear UK to Euroclear Bank Belgium with effect from Monday 15 March 2021. Irish market participants selected Euroclear Bank Belgium, as the preferred provider of a long-term central securities depository (CSD) for the Irish market. The Central Bank supervises key participants in the market, and the continuation of service by Euroclear is important to the ongoing trading, clearing and settlement of Irish equities post Brexit.

The migration of securities is the culmination of a unique and complex project involving stakeholders from Ireland, the EU and the UK. The CSD migration was an industry decision and industry-led project and has been actively supported over the last two and half years by the Central Bank of Ireland and the Department of Finance.

Commenting on the market migration, Deputy Governor Sharon Donnery, said :

“The Central Bank is responsible for supervision of regulated entities including the market operator and firms engaged in trading Irish equities. The successful migration ensures the continued settlement of trades in Irish securities traded on Euronext Dublin.

"The Central Bank has worked closely with industry participants since this migration project began and the Central Bank welcomes Monday's successful migration, which required significant commitment from Euroclear, Euronext and all Irish market participants to ensure the successful delivery of the project”.

Notes:

Central Securities Depositories (CSDs) are specialist financial institutions that hold securities and facilitate trading between financial market operators. CSDs are a vital and systemic part of market infrastructure that enable the effective functioning of settlement systems for stock exchanges. 

Most countries have a domestically located CSD traditionally associated with their stock exchange. However, due to the close historic links between the Dublin and London Exchanges, Ireland does not. The Irish market instead used a UK based CSD called Euroclear UK & Ireland which operates the CREST settlement system to settle Irish listed equities and Exchange Traded Funds (while Irish Government debt and corporate debt securities use Euroclear Belgium to settle).

The UK became a ‘third country’ as a result of Brexit and the knock-on effects for settlement is a market issue that required a market led solution as ultimately CSDs are private market operators. Euronext Dublin (formerly the Irish Stock Exchange) announced in October 2018 that it would transfer the settlement of trades in Irish equities and other exchange traded instruments from the UK operation to Euroclear Bank Belgium.

This project to migrate the Irish market has been an industry led project with Euroclear and Euronext Dublin central partners in its delivery. A range of legislative and non-legislative actions were taken and the Department of Finance and the Central Bank of Ireland were actively involved with all stakeholders since the issue of migration was identified.

The Government put in place dedicated legislation such as the Migration of Participating Securities Act 2019 and there were further provisions in the 2020 Brexit Omnibus Act and 2020 Finance Act to support the migration, as well as amendments to the 2014 Companies Act. The Irish public authorities also closely liaised with EU authorities to ensure that the Irish market could continue to temporarily use the UK based CSD in 2021 until the migration took place.

Further information is available on the Central Bank’s website.