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Commenting on the Commission consultation on an EU-wide legal framework for securities holding and transaction and on how future EU legislation in this field could address the issue, the FMLC is concerned that it remains uncertain which law determines legal rights related to securities held through financial intermediaries. The Hague Securities Convention is the most certain of the options put forward to date, FMLC said and says that the objections made to this convention are unconvincing.
The FMLC also strongly opposes any restriction of a future legislation on the legal effect of book entries to account providers that are regulated by a competent authority and, indeed, are compliant with the relevant regulatory regime.
The adoption of any such proposals would cause significant adverse effect to the systemic protection of account holders and the stability of the system, FMLC states. If this restriction is imposed, unregulated account providers will nevertheless continue to participate in the holding and settlement of book-entry securities.
The FMLC criticizes that “it would defeat the purpose of introducing a new substantive regime for the European Community if it were still incumbent upon member states to continue to legislate for the same matter at national level.”