23 May 2018

AFME calls for further progress in European post trade reform

The paper explores the issues currently impeding progress in European post trade reform and outlines some key objectives for public authorities and the industry in the paper entitled ‘A Roadmap for Integrated, Safe and Efficient Post Trade Services in Europe’.

Areas of focus include: a sound legal basis for cross border holdings in book entry securities, an efficient method of reclaiming withholding taxes, ensuring open access and interoperability for European CCPs, ensuring collateral management is harmonised and unencumbered by unnecessary restrictions and continuing the process of fully embedding T2S as a low cost, pan-European settlement platform.

Stephen Burton, Managing Director of Post Trade at AFME, said: “European post trade reform must go further if we are to build larger and more diverse capital markets in Europe. While the solutions put forward to date are necessary, they have not gone far enough in addressing the barriers to efficient post trade. In order to make progress towards an integrated, low-risk and low-cost post-trade eco-system in Europe, European and national authorities should prioritise reform. The overarching goals of post trade reform are well-established, the mandate and the foundations have been clearly set, now it’s time for action.”

One of the paper’s key recommendations focuses on the opportunities created by new technologies. With the advent of new technology, such as Artificial Intelligence, cloud-based applications and distributed ledger technologies, there is the potential to revolutionise how post trade services are delivered. The consequence for industry of not developing common standards and collectively maximising its benefits could be further fragmentation. Therefore, the paper calls for industry to work collaboratively on this.

Full paper

© AFME