The EC's proposals to harmonise settlement systems across Europe have been met with cautious optimism after years of failed attempts to reform this last leg of the trading cycle. But debate is growing as to how to define settlement functions.
The industry is already awaiting the implementation of the European Markets Infrastructure Regulation and the review of the Markets in Financial Instruments Directive (MiFID).
While MiFID will address issues relating to pre-trade and trading activities and Emir focuses on the post-trade arena of clearing, the settlement consultation launched in January will address the final stage of the trading cycle.
The proposed reforms will target the activities of central securities depositories, the national institutions that hold and administer securities.
This is not the first time that the EC has attempted to reform the European settlement landscape. The proposed regulation is the latest in a long line of initiatives that began 10 years ago with the Giovannini Group’s efforts to identify the main barriers to a harmonised and more efficient European settlement industry.
© Financial News
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