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18 March 2022

Bloomberg: Europe Eyes Bigger Share of Settling Securities Business

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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