30 November 2007

Speech McCreevy: Security Markets Consolidation and its Implications

Speaking at the Austrian Financial Markets Authority and Vienna Stock Exchange Conference in Vienna, Commissioner McCreevy outlined some of the recent developments of stock exchange mergers. “We are also witnessing MiFID-driven innovation”, he said mentioning the Project Turquoise; Project Boat; Chi-X; ICAP’s new ideas; and Equiduct. “This is what we want”, he continued. “We hope to see more to come”.

McCreavy outlined the two different threads that need to be separated. The threat on mutual recognition refers to Member States and stakeholders who pointed to a set of principles or ‘red lines’. These include:

- EU-US mutual recognition in securities should be a gradual process, with successive steps carefully prepared by political understanding, working with regulators on both sides.

- Unilateral action by the SEC or bilateral deals between particular Member States and the Americans will fragment and distort the single market.

- The same assessment criteria should be used by the US and the EU when determining whether to grant access to firms and markets established in the other jurisdiction.

- A situation where some EU jurisdictions would be excluded from participating in the scheme for arbitrary, non-substantive reasons, would not be welcome for EU's integrating markets.

- Business conducted within the territory of the European Union should only be subject to the laws of the EU and the Member States.

The threat on convergence refers to the differences between national rulebooks across the world on a multitude of issues “such as frequency of reporting, thresholds for shareholder disclosures, client classification, and the like.”

“We think the right approach is to tackle mutual recognition while we have the chance, and tackle convergence more gradually over the longer-term and through expert international fora such as IOSCO”, the Commissioner stated.

Finally, on clearing and settlement issues and the first results that could be drawn from the Code of Conduct the Commissioner took note that a significant number of link requests already came from various market infrastructures.

Full speech

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