Euroclear seeks to continue settling Irish shares even after hard Brexit

Euroclear is pushing authorities to allow it to continue settling Irish shares in the UK even in the event of a hard Brexit, according to sources.

The Republic – the only European Union member without its own central securities depository – has relied on Euroclear's UK-based operation, called Crest, to settle trades since the 1990s and the dawn of electronic financial markets.

Euronext NV, the owner of the Republic's stock exchange, favours moving the settlement of Irish shares to Brussels after Brexit, according to briefings to industry.

Once the UK leaves Europe’s single market, and after the accompanying loss of financial passporting rights, Crest probably will not be able to continue providing that service.

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Market rupture

The European Commission has said equivalence procedures for clearing and securities settlement can be "swiftly deployed" to prevent a market rupture after a hard Brexit.

If there's no deal, Euroclear wants the European Securities and Market Authority to allow it to continue to settle Irish shares on that basis, according to the people, who asked not be identified because the matter is private.

In response to questions, Euroclear said it is seeking further information on the timing and process of working within temporary equivalence structures.

"Our understanding is that this provides a route for potential continued settlement of Irish securities by Euroclear UK and Ireland immediately post-Brexit," the company said.

– Bloomberg