Euronext Expands T2S-based Settlement for Government Bonds
Euronext has announced a major step in its fixed-income strategy. Euronext Securities Milan has requested LCH SA to open settlement for all European government debts currently cleared by the CCP.
Why this matters for European bond markets
European government bond settlement has long been fragmented across multiple domestic central securities depositories. This fragmentation has increased operational complexity and inefficiency for market participants. Euronext aims to simplify cross-border bond settlement and improve market efficiency by consolidating settlement through a single European framework.
Role of TARGET2-Securities (T2S)
The new settlement model is built on the Eurosystem’s TARGET2-Securities platform. T2S is a single pan-European settlement system. It reduces fragmentation and improves safety and efficiency. It offers real-time delivery-versus-payment in central bank money, uniform settlement functionality, and strong operational resilience for euro-denominated securities.
Integrated clearing and settlement structure
The initiative aligns MTS, Euronext Clearing, and Euronext Securities into a unified fixed-income infrastructure. Robust CCP services supports the clearing. Settlement aligns with T2S standards. It creates a harmonised and capital-efficient European settlement model for government bonds.
Benefits for market participants
Clients settling government bonds through Euronext Securities will benefit from balance sheet netting, optimised cash and liquidity management, and lower capital consumption. The T2S environment also enables advanced features such as auto-collateralisation. Also, it improves transparency and reduces operational risk.
Current coverage and expansion plan
The service is already live for Italian, French, Dutch, Belgian, German, Spanish, and Austrian government bonds cleared at Euronext Clearing. Now, it will be extended to all European government debts currently cleared by LCH SA. It lets this activity settle within Euronext Securities.
Impact for Euronext
This development strengthens Euronext’s position as a central marketplace for European government bonds. It supports the group’s broader fixed-income strategy, including its Repo Expansion initiative and its European Offering for equities and ETFs. Also, it enables clients to manage multiple asset classes through a single access point.
About Euronext
Euronext is a pan-European stock exchange group. It offers trading and post-trade services for equities, bonds, derivatives, commodities, and foreign exchange. The company aims to connect European economies to global capital markets. Euronext provides a single, integrated marketplace with a unified trading platform.
Summing Up
This move is a shift toward a more unified European government bond settlement model. Euronext reduces fragmentation while improving efficiency and capital usage by leveraging T2S. It reinforces Euronext’s role as a core infrastructure provider for European fixed-income markets.
Register your company now and feature on our homepage!
