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24 May 2006

Commission draft working document on post-trading activities

The Commissions DG Internal Market released a draft working document on post-trading activities in the EU securities market. The document provides an analysis of the current situation and state of play and also gives an overview about the responses to the Commission communication issued last year.

Summarizing the comments received the Commission states that there is a strong support for a post-trading Directive as long as it remains a framework Directive dealing with high-level principles. Respondents supported the need for comprehensive rights of access, although some found it only necessary for remotely foreign post-trading infrastructure service providers and central banks, while others considered this right also for CCPs and CSDs.

The home country principle with regard to supervisory cooperation was supported by most market participants while public authorities called for a more flexible approach mentioning particularly the issue of systemic risk in the host country and the need for the host country authorities to be implicated in addressing it.

With regard to the benefits of integrated post-trading systems, the Commission notes that transaction costs can be lowered by 7-18 per cent, leading to a higher GDP level of 0.2-0.6 per cent at least.

Together with the draft working document, the Commission published an analysis of studies examining European post-trading costs summarizing the most recent publications and commenting on their possible weaknesses. It is also accompanied by an Economic Impact Study and an overview document about the execution costs of retail equity trades.

Draft working document
Annex I - Analysis of studies examining European post-trading costs
Annex II - Economic impact study on clearing and settlement
Annex III - Cost of execution of retail equity trades

© European Commission

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