The London Stock Exchange Group has announced is to establish a central securities depository (CSD) in Luxembourg.

The Luxembourg CSD will build on LSE's Italian CSD, Monte Titoli, and provide a full range of custody and settlement services.

The CSD is slated to launch in the first half of 2014 and already, JPMorgan has confirmed that it intends to use the Group to provide settlement, custody and asset servicing services for its international collateral management business.

Raffaele Jerusalmi, CEO of Borsa Italiana and director of capital markets at the London Stock Exchange Group said: “The Group is well placed to provide a full range of post trade services to meet the evolving needs of our customers arising from on-going financial regulatory change and the continued focus on operational efficiency.

“We are also pleased to note that J.P. Morgan has announced its intention to select LSEG as its provider of settlement, custody and asset servicing as part of its international collateral management business.”

The Group said it selected Luxembourg as a result of customer demand and the CSD would function on an open-access model, which would allow clients to meet their regulatory obligations under the European Market Infrastructure Regulation (Emir), which requires central counterparties to hold collateral assets posted as margin or as default fund contributions at a securities settlement system, such as a CSD.