EU depositories settled a quadrillion of transactions in 2019; Plan to simplify passporting to boost cross-border volumes
The European Union is introducing new rules to boost its efficiency
in securities settlement and to attract more volumes as it vies for
dominance with the U.K. after Brexit.
The EU’s executive arm on
Wednesday proposed changes to its Central Securities Depositories
Regulation to help reduce compliance costs and regulatory burdens and to
allow the system to offer more cross-border services, the European
Commission said in an e-mailed statement.
CSDs help deliver securities to a buyer in
exchange for cash and are central to EU’s capital markets, settling more
than a quadrillion euros ($1.1 quadrillion) in shares and bonds,
according to data for 2019. The EU wants to boost its members’ ability
to win clients and liquidity away from U.K. clearing houses which will lose access to the bloc’s markets after 2025.
“By
reducing red tape for Central Securities Depositories that want to
expand their activities cross-border, we are creating a truly single
market for securities settlement in the EU, and promoting competition in
the market,” the EU’s financial markets chief Mairead McGuinness said
in the statement. “This contributes to our ultimate goal of building up
the Capital Markets Union.”
The main improvements
would simplify so-called passporting, allowing CSDs to operate across
the bloc with a single license while removing costly and duplicate
procedures.
Bloomberg
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