# Euroclear: Definition, How It Works, vs. Clearstream

![Euro sign sculpture.The European Central Bank is the central bank for the euro and administers monetary policy of the eurozone. The headquarter is in Frankfurt, Germany,14 March 2018](https://www.investopedia.com/thmb/ZvrnBi_IdxT_qoSFU84NLV8z2l0=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/euro-sign-sculpture-the-european-central-bank-is-the-central-bank-for-the-euro-and-administers-monetary-policy-of-the-eurozone--the-headquarter-is-in-frankfurt--germany-14-march-2018-958299412-5b704a8046e0fb00505ff262.jpg)

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## What Is Euroclear?

Euroclear is one of two Financial Market Infrastructure (FMI) providers in the Eurozone. Euroclear offers many financial services for global markets and specializes in settling securities transactions on European exchanges.

The other principal European FMI is [Clearstream](https://www.investopedia.com/terms/c/clearstreaminternational.asp), formerly the Centrale de Livraison de Valeurs Mobilières (CEDEL).

### Key Takeaways

*   Euroclear is a Financial Market Infrastructure (FMI) provider that settles and clears securities trades executed on European exchanges.
*   Euroclear also functions as a central securities depository (CSD), acting as a custodian for major financial institutions involved in European markets.
*   In addition to stock trades, Euroclear handles orders in fixed-income securities and derivatives and offers many more services.
*   In May 2024, Euroclear, DTCC, and Clearstream announced they were working on a framework to create an industry-wide ecosystem for driving the tokenization of illiquid assets and their acceptance.

## Euroclear History

Euroclear is a central securities depository and one of the oldest settlement systems. It was originally subsidized by Morgan Guaranty Trust Co. of New York, which was a part of J.P. Morgan & Co. It was founded in 1968 to settle trades on the then-developing [Eurobond](https://www.investopedia.com/terms/e/eurobond.asp) market. Its computerized settlement and deposit system helped ensure the safe delivery and payment of Eurobonds. In 2000, Morgan Guaranty Trust transferred these activities to Euroclear Bank.

Euroclear is publicly owned and governed. From 2001 to 2007, the firm acquired several central securities depositories (CSDs), eventually evolving into one of the world’s largest Financial Markets infrastructure providers. Some of its acquisitions include:

*   Sivocam, the CSD of France
*   CIK and Necigef, the CSDs of Belgium and the Netherlands
*   [CrestCo](https://www.investopedia.com/terms/c/crest.asp), the CSD for Irish equities and all U.K. securities

## How Does Euroclear Work?

Euroclear acts as an FMI and a [clearinghouse](https://www.investopedia.com/terms/c/clearinghouse.asp) for its clients, many of whom trade on European exchanges. It is a financial institution that acts as an intermediary between financial instrument buyers and sellers. They take a position in the middle of each trade, acting as the buyer to the seller and the seller to the buyer. Most of its clients consist of banks, [broker-dealers](https://www.investopedia.com/terms/b/broker-dealer.asp), and other institutions professionally engaged in managing new securities issues, market making, trading, or holding a wide variety of securities.

Euroclear settles domestic and international securities transactions, covering bonds, equities, [derivatives](https://www.investopedia.com/terms/d/derivative.asp), and investment funds. Over 1 million international securities are accepted in the Euroclear system, covering a broad range of internationally traded fixed- and [floating-rate debt](https://www.investopedia.com/terms/f/frn.asp) instruments, [convertibles](https://www.investopedia.com/terms/c/convertibles.asp), [warrants](https://www.investopedia.com/terms/w/warrant.asp), and equities.

## Euroclear vs. Clearstream

Both Euroclear and Clearstream are Financial Market Infrastructure providers, offering a wide variety of financial services in addition to clearinghouse services worldwide. Both institutions serve the global community in the same market. Here are some of their similarities and differences.

## Euroclear Developments

In May 2024, Euroclear announced a partnership with other global Financial Market Infrastructures, DTCC and Clearstream. The partnership is focused on creating a framework for a global digital asset ecosystem. The intent behind this framework is standardization of distributed ledger technology (DLT), digital assets, and interoperability between traditional systems and DLT.

To be included within this framework are proposals that would reduce connectivity costs for existing market participants and make it easier for new entrants to enter. It will also include standardization of digital asset processes and regulatory treatment, technical connectivity, funding treatments, management of core processes, and much more.

## What Currencies Can Settle in Euroclear?

Euroclear offers about 50 settlement and 100 denomination currencies.

## What Does Euroclear Do?

Euroclear is a Financial Markets Infrastructure (FMI) provider, which means it offers a wide array of financial services to many markets globally.

## Who Owns Euroclear?

Euroclear Holding owns Euroclear SA/NV, the owner of Euroclear Bank, which operates Euroclear, the FMI.

## The Bottom Line

Euroclear is one of two principal securities clearinghouses in the Eurozone. The other is Clearstream. Euroclear specializes in verifying information supplied by brokers involved in a securities transaction and settling securities transacted on European exchanges.  

> **Article Sources**
>
> 1.  Euroclear. “[Our History](https://www.euroclear.com/about/en/history.html).”
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> 2.  National Archives, Federal Register. “[Self-Regulatory Organizations; Morgan Guaranty Trust Company, Brussels Office, as Operator of the Euroclear System and Euroclear Bank, S.A.; Order Approving Application to Modify an Existing Exemption from Clearing Agency Registration](https://www.federalregister.gov/documents/2001/01/04/01-216/self-regulatory-organizations-morgan-guaranty-trust-company-brussels-office-as-operator-of-the).”
>     
> 3.  Euroclear. “[Our Business](https://www.euroclear.com/about/en/business.html).”
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> 4.  Clearstream. "[Snapshot](https://www.clearstream.com/resource/blob/1313350/65ada50aaeaf01e57d4ab34578d1f945/clearstreamsnapshot-data.pdf)."
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> 5.  Euroclear. "[Euroclear at a Glance](https://www.euroclear.com/content/dam/euroclear/Credentials/Euroclear-Credentials.pdf)."
>     
> 6.  Euroclear. "[Advancing the Digital Asset Era, Together](https://www.euroclear.com/content/dam/euroclear/news%20&%20insights/Format/Whitepapers-Reports/advancing-the-digital-asset-era-together.pdf)."
>     
> 7.  Euroclear. "[Euroclear Services](https://www.euroclear.com/services/en/primary-issuance.html)."
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> 8.  Euroclear. "[About Boards and Management](https://www.euroclear.com/about/en/ourgovernancestructure/Aboutboardsandmanagement.html)."
>     
> 9.  Euroclear. “[Settlement](https://www.euroclear.com/services/en/settlement.html).”