ESCB and CESR: Recommendation on post-trading infrastructures in the EU
24 June 2009
A single set of recommendations should improve the efficiency of the market infrastructure, assist public authorities in addressing the fragmented European post trading sector and should not impose undue costs on market participants, the report says.
The main aim of the ESCB-CESR Recommendations is to promote competitive, efficient, safe and sound pan-European post trading arrangements. This should ultimately lead to greater confidence in securities markets and better investor protection and should in turn limit systemic risk. In addition, the Recommendations seek to improve the efficiency of the market infrastructure, which should in turn promote and sustain the integration and competitiveness of the European markets. Moreover, having a single set of Recommendations should also assist public authorities in addressing the fragmented European post trading sector and should not impose undue costs on market participants.
The Group agreed to deepen and adapt to the European context some of the CPSS-IOSCO Recommendations with the following set of objectives:
- to increase confidence in the EU markets by providing clear and effective Recommendations;
- to foster the protection of investors and, in particular, retail investors;
- to promote and sustain the integration, competitiveness and, where needed, harmonization of European securities markets by encouraging efficient structures and market-led responses to developments;
- to ensure the efficient functioning of securities markets and the cost effective clearing and settlement of their transactions;
- to further limit and manage systemic risk and to enhance the safety, soundness and efficiency of CSDs and CCPs operations and
- to provide a single set of Recommendations for CCPs, CSDs and other relevant securities service providers in the EU, applied in a consistent manner without the imposition of undue costs.
The non-binding Recommendations are addressed to public authorities in the EU. Within their respective competences, these authorities intend to promote and monitor the application of the Recommendations within their jurisdictions.
The Group analysed a wide range of aspects relevant for the clearing of OTC derivatives in general and of credit derivatives in particular, including issues related to access, the protection of non clearing participants, risk management requirements, challenges related to the handling of credit events for credit default swaps (CDS), dispute resolutions, price transparency, various operational aspects, governance issues, and potential risks in links between CCPs.
© CESR - Committee of European Securities Regulators
