Euroclear is an international securities settlement system that completes and safekeeps trades in bonds, shares, and funds for banks and other financial institutions. It operates as an international central securities depository, or ICSD, for domestic and cross-border transactions.
Euroclear handles the post-trade stage. Once a trade is agreed, it transfers the securities to the buyer and the cash to the seller, then holds the securities in custody and processes corporate actions on them, such as interest payments and redemptions at maturity.
Euroclear owns CREST, the central securities depository that settles UK and Irish shares and gilts. CREST handles domestic UK settlement, while Euroclear's international arm settles cross-border eurobonds and securities across many markets.
A bank buys EUR 10 million of international bonds for a client.
Once the trade is executed, Euroclear settles it by moving the bonds to the buyer and the cash to the seller.
Euroclear then holds the bonds in custody and processes future corporate actions on them, such as coupon payments and redemption at maturity.