The European Central Bank (ECB) published the results of the joint consultation undertaken with
CESR on standards for clearing and settlement in the European Union.
The ECB and CESR received 55 contributions from representatives of custodian banks, domestic central securities depositories (CSDs) and international central securities depositories (ICSDs), central counterparties (CCPs), stock exchanges and various associations market players.
Excerpt of Executive Summary:
All responses express strong support for the central banks’ and CESR’s initiative of having common rules in order to promote the safety and efficiency of clearing and settlement activities in the European Union (EU).
Concerns were voiced regarding the extent to which this initiative would duplicate the work of other initiatives. In this respect several of the respondents called for harmonisation of the various legislative, regulatory and industry initiatives, especially as regards reporting requirements and operational standards.
Although the ESCB-CESR objective of applying the functional approach to regulation is broadly endorsed by the respondents, some respondents argue that function should be defined in terms of ‘infrastructure’ and ‘intermediary’, while others indicate that each segment of the value chain of a securities transaction should be considered as a separate function. Some respondents hold the view that competition issues should be left completely outside the scope of ESCB-CESR work and be handled by the relevant national regulators and EU institutions.
Finally, in line with the objectives of ESCB-CESR work, several respondents expressed the view that many of the standards should be addressed to competent national supervisory competent authorities or NCBs who are in a position to instigate legislative and regulatory changes.
Changing the nature of the standards from non-binding recommendations to more binding standards is generally endorsed. Nevertheless, some respondents express a preference for recommendations and market-led solutions for certain items such as those related to efficiency.
Summary
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