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16 October 2002

EP Committee Working Document on Clearing and Settlement




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The Parliaments Economic and Monetary Affairs Committee released a Working Paper on the forthcomming report on Clearing and Settlement responding to the Commission Comunication released in May. Rapporteur Generoso Andria wants to encourage a debate before coming to any conclusions.

One option debated is the creation of 3 Central Securities Depositaries (CSD) which carry out settlement functions - one for the UK market, one for central Europe and one for southern Europe. The CSDs should only provide core services within special utility entities. There should be a separation of their functions between the commercial ('value-added services' services) and the non-commercial functions ('core' services).

Alternatively, the current market and legal barriers could be swept away creating optimal market conditions, without necessitating a reshaping of the entire current architecture. The market could introduce appropriate solutions where possible, with risk-based proportionate legislation only where necessary.

Other points discussed:

  • it is discussed if the legal structures of clearing and settlement should be 'profit' or 'non-profit', and if an effective corporate governance could ensure the public interest of users in terms of access, choice and interoperability.
  • barriers related to national restrictions on the location of clearing and settlement systems and national restrictions are the most harmful of the barriers. Tax barriers will be a particularly difficult area to resolve. Several market barriers could be dealt with by co-ordination by market organisations.
  • the creation of a single Securities Code could appear too ambitious a goal in regulatory terms. Alternative proposals could include the creation of a list of legislative barriers in national markets providing information to suppliers of cross-border transactions.
  • the European Central Bank will possibly to play a role as an overall coordinator of supervision amongst Member States.

    Working Document on Clearing and Settlement
    Commission Communication on Clearing and Settlement

    © European Parliament


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