SIX Securities Services and Euroclear Bank alliance targets Swiss private banks
Swiss post-trade company SIX Securities Services has allied with Belgium’s Euroclear Bank in a deal aimed at Swiss private banks and their high net worth customers.
The deal focuses on international fund services, with Euroclear hoping to capitalise on demand from clients for more cross-border investments. SIX already provides domestic fund services.
“We are looking to the private banking customers in Switzerland – the high-net worth individuals, who want to make cross-border investments in addition to the domestic payments SIX already covers. We can help SIX with that,” said Lieven Libbrecht, senior director of product management at Euroclear Bank.
Under the pact, SIX and Euroclear will provide order routing and unit settlement for fund transactions within Switzerland and across Europe. All asset classes are covered, and segregated accounts will be available. The first phase of the cooperation is expected to begin in January.
According to Euroclear, one of the reasons it was chosen by SIX was for its experience with hedge fund clients and international markets. Euroclear typically provides settlement and securities services for cross-border transactions, and has a network of 500 transfer agents. The plan also aims to achieve cost savings through processing standardisation and reduction in risk through straight-through processing of transactions.
The deal is not the first time SIX Group has partnered with another well-known financial institution. Its exchange wing made an order routing deal with pan-European dark pool Liquidnet in 2012. It is also not the first time Euroclear has partnered with domestic financial infrastructure providers. In its Asian business, Euroclear has already partnered with the CSD in Korea and with the Taiwan depository.
“Business now is no longer only about doing things for ourselves. Through partnering with local firms in markets such as Korea, Taiwan and others, we can make a difference to our customers,” said Libbrecht.