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The integration of Europe's financial markets is a prerequisite for reaping the full benefits of the single currency, in particular by facilitating an optimal allocation of capital across the European Union. The markets for short-term securities are comparatively less integrated than other segments of the euro-denominated money market, and private sector initiatives aimed at improving the current situation are welcome.
The following documents are available:
Documents can also be downloaded from the ECB web site
Interested parties are invited to send their contributions to the ECB by 30 November 2002 (postal or by email under short-term@ecb.int)
Summary of the Documents
ACI Consultation
ACI STEP is inviting all interested parties to provide comments on the conclusions and
recommendations included in its report entitled “The Short-Term Paper Market in Europe”.
ACI STEP also invites all interested parties to put forward any additional information or initiative susceptible to facilitate collective action by the participants in the European short-term securities markets, with a view to achieve the development and integration of these markets.
ACI STEP finally invites all interested parties to identify the obstacles to the integration of the market that they cannot be eliminated by free competition or by collective action, but would require an active involvement of legal and/or regulatory authorities. ACI STEP intends to formally convey these concerns to the relevant authorities at the end of the consultation process.
EURIBOR-ACI report: 'The Short-Term Paper Market in Europe'
Summary of recommendations:
EFMLG report: “The Money Market: Legal Aspects of Short-Term Securities”
Excerpt of summary:
The present Report contains a legal analysis of the short-term securities most used in the money market, namely, certificates of deposit (CDs), commercial paper (CP), and medium-term notes (MTNs). The Report has been prepared by a Sub-Group of the EFMLG on legal aspects of short-term securities in support of the work in this field of the Money Market Contact Group, the Euribor ACI and the Short Term Paper Task Force.
The Report details the differences in the legal, regulatory and taxation regimes, as well as the market documentation, that still separate the national markets for short-term securities. It places special emphasis on CP markets. The findings of this Report and its Annexes indicate that the main legal barriers to the integration of the short-term money market are the differences between jurisdictions with regard to:
(1) the national legal definitions,
(2) the legal specification of the entities authorised to issue such securities,
(3) the minimum amount required for the issue,
(4) the obligation, or lack of obligation, to file prospectuses,
(5) the withholding tax applied to interest payments,
(6) the capacity of UCITS to invest in such securities, and
(7) the degree or intensity of regulation and supervision.
The EFMLG draws the attention of Member States and of the European Community to these issues, and recommends urgent action. Differences in standard market documentation need to be revised and new harmonised standards agreed. The recommendations at the end of this Report indicate the required legal actions to achieve the desired integration of these markets. These recommendations are put forward under the assumption that “integration of markets” require a legal and regulatory level playing field, i.e. the same rules across the euro area, so that these short-term financial instruments are equally available to economic agents throughout the single currency area.