FRANCE - French financial services group Société Générale has fleshed out the rationale behind its decision earlier this year to set up SG GSSI, Global Securities Services for Investors – citing market changes and European regulation.
In February the bank said the arm, headed by Alain Closier, would “provide full investor services on securities and listed derivatives covered by the group around the world”.
The move is in response to changes in the markets and European regulation Closier told a briefing in Paris today.
“We’re offering a one-stop shop for clients. On the one hand markets are opening due to the use of remote access systems which are gradually reducing the role of local players, we see this phenomenon in all markets, both in the US and Europe.
“On the other hand European markets are in the process of consolidation. Although markets are still fragmented and access is expensive, the move towards harmonisation has started, for example Euronext covers five countries. We believe the European landscape will have changed dramatically in five years and we are positioning ourselves with this in mind.”
He said SG GSSI intends to offer two services to the securities business: to provide all different client types with access to all available markets; and in Europe to have global capacity to key market areas such as Euronext/LSE for the UK, France, Benelux and Portugal and Eurex/Virt-X for Germany and Switzerland.
“SG GSSI has the necessary elements to respond to these developments,” Closier said. “We are present in all derivatives markets and on most cash market we already hold leading positions on the Euronext and Eurex markets.”
The other stimulus for the restructuring was a massive increase in regulations and, in Europe, the offensive launched by the Central Securities Depositary in relation to traditional securities services that until now have been provided by banks.
The main strategic focus of the new division include the expansion and diversification of the broker operation through the construction of a combined cash and derivatives offer to make SocGen’s Fimat a major global player.
These include the extension of depositary global custody and fund administration into Europe; the strengthening of new value-added offers, notably in liquidity management; the development of the retail custody business; the group’s multi-bank capacities; and effective cost control through optimisation of processing platforms, he said.