01 July 2004

BNP Paribas contribution to ESCB-CESR draft Standards on Clearing and Settlement

BNP Paribas Securitiy Service (BP2S) issued a report to the ESCB-CESR revised draft Standards on Clearing and Settlement. The contribution to this second consultation intends to illustrate the consequences for the market of some of the proposed standards, as well as the issue of coherence given other initiatives in this industry. It will not reiterate the principles stated in the first contribution by which we continue to stand.

Among others BP2S underlines the importance that the standards reflect market reality and not theoretical concepts, since the proposed clearing & settlement standards will establish a precedent which may influence future related CESR work, for instance on CCPs, or the Commission initiatives. It is not acceptable for the industry that the current market misconception, based on the confusion between CSDs, ICSDs and custodian banks, is maintained. Although this aspect was largely commented in contributions submitted to the first consultation, it still forms the basis of CESR-ESCB standards, which are proposed for immediate implementation and review in five year time. We would therefore recommend that the working group launches a detailed fact finding project, which could be part of its assessment methodology analysis, prior to finalizing the standards.

Central bank for Europe's single currency area
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