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Euroclear is one of the largest financial service company that act as a clearing house for securities traded in Euromarkets. It is a Belgium based company founded by JP Morgan &co. in the year 1968 and is one of the oldest settlement systems
• The euro clear system was by the Morgan trust company until the start of 2001 where the control was transferred to euro clear bank
• Euroclear settlement includes transactions covering bonds, equities, derivatives and investment funds.
• It is applicable on both international as well as domestic transactions,
• It specialises in the settlement of securities transaction. The settlement refers to cases like change in the ownership from buyer to seller, payment by the buyer to the seller as well as transfer of securities from the seller to buyer.
• The safekeeping and asset servicing of these securities.
• Specialises in verifying information supplied by two brokers. In order to maintain transparency and accuracy of the information Euroclear verifies information supplied by both the buyer’s broker as well as the seller’s broker.
• Uses computerised settlement deposit system. Computerised settlement ensures safety in monetary and information transaction. It improves transparency, easy recording as well as accountability.
• It also acts a depositary and custodian bank
Users and supervision
Each of the central security deposits are regulated by the authorities within the respective home countries whereas the retail investors can directly have accounts in local central security deposits. These deposits are according to the home country rules and regulations.