* Full year dividend up 50%
* Remaining an independent company is best – Mostrey (Updates with interview with Mostrey)
By Huw Jones
LONDON, Feb 18 (Reuters) – Securities settlement house Euroclear said on Tuesday it would hold talks with its regulators about making it easier to buy and sell its shares, as demanded by some of its small investors.
Euroclear, which unveiled a record net profit of 431 million euros ($467 million) in 2019, up 34% on the prior year, said the board had concluded its review in December on improving liquidity in its privately-held shares, without giving details.
The Brussels-based company hired Goldman Sachs investment bank last year to advise on options as consolidation in market infrastructure gathers pace, with the Swiss Exchange making a bid for the Madrid bourse.
“The next priority is for Euroclear to launch a regulatory consultation,” chairman Marc Antoine Autheman told investors.
Given Euroclear’s importance to Europe’s financial system, regulators will want to ensure changes to its structure avoid any deterioration in the company’s “risk profile”, Euroclear CEO Lieve Mostrey said.
This will be a focus of talks with Euroclear’s main regulator in Belgium and with regulators that oversee subsidiaries elsewhere, Mostrey said.
Top shareholders, including Euronext, the London Stock Exchange and ICE, own just over half of the company. But there is a long tail of over 100 shareholders that own fractions of 1% and want a more efficient way of cashing in.
Euroclear has already ruled out a merger and was looking at a listing, as well as a mechanism for placing shares with major investors.
“Remaining independent is the best way we can service a variety of clients and a variety of products,” Mostrey told Reuters.
She declined to say whether both options were still on the table, saying discretion was the best policy ahead of talks with regulators.
“We will discuss this as soon as it’s the right moment to talk further about them,” she said.
She described talk of disagreements among shareholders as speculation.
“It is fair to say that several shareholders would like to know exactly how things are evolving. They just want to see clarity, that is for sure,” Mostrey said.
Euroclear, which settles stock trades for the London Stock Exchange, Euronext and other exchanges, said it would pay a full year dividend of 82.4 euros per share, up by 50% on 2018.
The company is a cornerstone of Europe’s financial infrastructure, ensuring the completion of securities transactions worth 837 trillion euros last year.
It looked after 30.1 trillion euros of assets in 2019, about half the European settlement market.
Settlement refers to the final leg of a transaction whereby legal ownership and safekeeping of a stock is exchanged for cash.
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