The Commission's Legal Certainty Group (LCG) issued a report calling for an improved and harmonised legal framework for holding and settlement of securities. The report also proposes to give issuers free choice between European CSDs.
The Commission's Legal Certainty Group (LCG) issued a report calling for an improved and harmonised legal framework for holding and settlement of securities through intermediaries and for the processing of corporate actions. The report also proposes to give issuers free choice between European CSDs.
- Recommendations 1-11 address the legal effects of book-entries made to securities accounts and deliver a set of rules that covers legal aspects, such as the different methods for creating security interest, priorities, or the protection of the integrity of the issue.
- Recommendations 12-14 propose the removal of insufficiencies in corporate actions processing by introducing a rule on cross-border interconnectivity between conflicting models of securities holding. They also propose a rule on the specific duties of intermediaries regarding the information flow between investor and issuer as well as on the exercise of certain investors' rights through the holding chain.
- Recommendation 15 ties in with the Code of Conduct for Clearing and Settlement and advocates that issuers should have a free choice in choosing their Central Securities Depository.
The Commission will take a decision on the appropriate way forward before the end of 2008.
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