The Commission proposed that the European Community should sign the Hague Convention, a multilateral treaty on determining the ownership of securities held in electronic form.
The Convention provides a uniform legal formula for determining proprietary rights and will be particularly useful in cases where securities are held through a chain of financial intermediaries in different countries. When adopted, the Convention will affect a number of existing EU Directives, such as the Collateral and the Settlement Finality Directive.
Internal Market Commissioner Frits Bolkestein said 'In an environment in which the great majority of securities are already held in electronic form, a world-wide agreement on a common legal formula to determine proprietary rights will stimulate cross-border activity, not only at EU level but on a global scale, and will become an important factor in promoting the internationalisation of financial markets'.
Following the signature of the Convention, the Commission will put forward a proposal for the necessary Council Decision and at the same time, proposals to amend the Directives affected. The Commission hopes that ratification can be completed in 2004 or early 2005.
Press release
Commission proposal
© European Commission
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